‘Move will enable govt to reduce national debt’

KUALA LUMPUR: Economists and market observers have lauded the government’s decision to cancel the East Coast Rail Link (ECRL) and Trans-Sabah Gas Pipeline projects, which would have cost tens of billions of ringgit.

Asian Strategy & Leadership Institute Centre of Public Policy Studies chairman Tan Sri Ramon V. Navaratnam said it was testament to Dr Mahathir’s power of persuasion to get the Chinese government to agree.

“It is wonderful that the Chinese government sees Dr Mahathir’s point of view.

“He must have strong persuasive powers,” he told the New Straits Times Press yesterday.

Ramon said the Chinese government must have recognised that the projects were not viable and would result in a financial strain to the government. Hence, they should be cancelled.

“If the projects were viable and sustainable, I’m sure the government would have gone ahead with them.”

Sunway University Business School economics professor Dr Yeah Kim Leng said the decision would pave the way for the government to reduce its national debt.

He said it was a positive development in Malaysia’s debt management.

“Given that the viability of these projects remains controversial, it i s best to cancel them.”

Yeah said the government could undertake these projects in the future once the country’s financial situation improved.

He said the agreement was a sign of improved Malaysia-China ties, which in turn, would enhance Chinese investors’ confidence in the country.

Ramon said the government should also review paying a hefty compensation due to the cancellation of projects with China and Singapore.

“If a contract is not fair, it must be rectified.

“The question of compensation should not arise unless there is actual expenditure incurred,” he said, adding that the government should instead focus on providing more basic infrastructure for the poor and contain the deficit level.