KUALA LUMPUR: The total cost of the East Coast Rail Link (ECRL) project, previously announced as RM55 billion, is inaccurate, Tun Daim Zainuddin said.
The chairman of Malaysia’s special economic council said RM55 billion is only the first phase of the project. The second phase would cost another RM11 billion.
“If you take into account interest rates and all, it would probably be much more,” he said at a press conference here.
Daim said 85 per cent of the ECRL project would be funded by a Chinese Exim Bank soft loan, with 3.25 per cent interest. The balance of 15 per cent will be financed with sukuk programmes through local banks.
Over the past six days, the council has had over 40 meetings with various government-linked companies (GLCs), government-linked investment companies (GLICs), senior government officials, trade unions and ECRL operator Malaysia Rail Link Sdn Bhd.
The meetings are aimed to give the council a better picture of the state of the nation’s economy, finances and key projects. It will then present the findings and recommendations to Prime Minister Tun Dr Mahathir Mohamad and his Cabinet.
Asked about the possibility of a negative credit rating following the zero-rated goods and services tax (GST) beginning June 1, Daim said: “I am not very concerned about credit ratings. We were downgraded before, in 1998.”
He also pointed out how credit rating agencies had previously given high ratings for subprime securities in the US before the 2008 financial crisis.
Moody’s Investors Service yesterday reiterated its view that the Pakatan Harapan government’s plans to abolish GST will be credit negative to the counrty, if implemented without adjusting measures.
On the sales and services tax (SST), which the government planned to reintroduce in place of the GST, Daim said the SST rate has not been finalised yet and may take another two to three months.