ECRL, TSGP SCRAPPED
Govt may have to pay compensation, says Dr M
ECONOMISTS and market observers have praised the prime minister for getting China to agree to cancel the ECRL and Trans-Sabah Gas Pipeline projects, which would have cost the country tens of billions of ringgit.
COUNCIL OF EMINENT PERSONS NOT DISBANDED YET, AS FAR AS PM IS CONCERNED
THE government has decided to cancel the multi-billion East Coast Rail Link (ECRL) and Trans-Sabah Gas Pipeline (TSGP) projects for now, said Prime Minister Tun Dr Mahathir Mohamad.
Dr Mahathir said he had conveyed the decision to the Chinese government.
He said Chinese President Xi Jinping and premier, Li Keqiang, understood the problems faced by Malaysia.
“I have explained to them and they understood the situation and accepted them.
“I believe China does not want Malaysia to become a bankrupt state,” he said at the end of his five-day visit to China.
Dr Mahathir said negotiations would be made to seek a way out of the projects, at the lowest possible cost.
He said due to the “stupidity” of the previous government’s negotiations, the present government might have to pay compensation.
“Why should we have to sign off on an agreement where we have to pay a large compensation if the project is not continued.
“In any agreement, there should be an exit clause which is fair to both parties.
“But in this case, if we cancel it, we have to pay a large sum,” he said.
ECRL, the RM81 billion-project, spanning 688km linking Port Klangand Kota Baru, was launched last year and slated for completion in 2024, while TSGP involves the construction of a 662km gas pipeline from Kimanis to Sandakan and Tawau costing about RM4 billion.
Both projects have been sus- pended since July.
Dr Mahathir had previously said that the current terms for the projects undertaken by the previous government were not good which, among others, entailed that money should be paid, regardless of the construction progress.
On the possibility that the cancellation would harm MalaysiaChina relations, he said he had explained to the Chinese leaders why Malaysia had to cancel the projects, and that they understood the reasons.
“Initially, there were some misunderstandings, but now, they understand why we have to do it.”
Dr Mahathir said Malaysia-China relations remained strong, and that he had been invited to visit the country in April next year to attend the Belt and Road Forum.
He said that during his visit, he had explained to the Chinese government on the types of foreign direct investment (FDI) that Malaysia needed.
For Malaysia, FDIs were investors who brought in capital and technology by setting up factories in the country, using locals as labour, he added.
“It’s not about buying land and setting up new townships as this can be done by Malaysian investors.”