PUTRAJAYA’S success in getting China to renegotiate the East Coast Rail Link is a big win for Dr Mahathir Mohamad, said a New York-based academic today.
Writing in Forbes, professor and chair of the Department of Economics at LIU Post in New York, Panos Mourdoukoutas said Dr Mahathir made good on his election campaign promise to re-negotiate China’s investments in Malaysia.
He said the investments served the interests of Beijing more than Putrajaya.
“The trouble is that many of China’s infrastructure projects aren’t economically viable, as they are built at inflated costs and leave countries involved heavily indebted to Beijing.”
He said this had happened to Sri Lanka and many other countries who are facing similar debt traps.
“It’s this debt trap that Prime Minister Dr Mahathir Mohamad been trying to avoid.
“Back in August he cancelled the East Coast Rail Link project, forcing China back to the negotiating table.
“And he is winning, as evidenced by the new deal, which has cut the cost of the project substantially,” he said.
On Friday, Malaysia reached an agreement with China to reduce the construction cost for Phase 1 and 2 of the ECRL to RM44 billion. The new cost is a reduction of RM21.5 billion from its original cost of RM65.5 billion.
Under the new deal, the train route will be shorter by 40km and includes stops in Negri Sembilan. The previous route through Bentong has been scrapped.
Dr Mahathir suspended the project shortly after Pakatan Harapan took over the government last May, citing its exorbitant cost and “unfair” terms that his predecessor Najib Razak had signed off on.
Putrajaya had hinted it would cancel the project, but changed its stand when faced with a huge cancellation fee.
THE MALAYSIAN INSIGHT