KUALA LUMPUR: The RM10 billion supposedly quoted to Putrajaya to undertake the East Coast Rail Link (ECRL) project has raised the eyebrows of some economists and market observers.
They said the government should provide the necessary details, including financial feasibility and technical capacity to justify the proposals.
“It is difficult for us (rakyat) to define. We must see the facts and figures of the contract proposals,” Asian Strategy & Leadership Institute’s Centre of Public Policy Studies chairman Tan Sri Ramon V. Navaratnam told NST Business in a telephone interview recently.
Ramon said the government should provide reports from financially and technically competent consultants so that the public would be well-informed of the project’s offerings.
The government initially said it could not afford to proceed with ECRL, an RM81 billion project spanning 688km linking Port Klang and Kota Baru, which was launched last year and slated for completion in 2024.
However, Prime Minister Tun Dr Mahathir Mohamad recently said studies were still being done on whether to defer the China-backed project or deal with it in some other way.
Dr Mahathir said Putrajaya had received offers from local and Chinese companies to undertake the project for as low as RM10 billion.
He also said that his administration would consider cheaper alternatives, adding it would be foolish to ignore them.
Ramon believed that the Chinese authorities were matured enough to understand Malaysia’s situation, particularly its fiscal condition.
“If the proposal can be shown to them (Chinese authorities) that there is indeed such a big difference of cost, I’m sure the Chinese may want to enter into a joint enterprise. They have to look after their own reputation. They cannot leave the impression that they are over-charging.
“The ideal way is to have a joint-venture between China and Malaysia, where the price is proven to be fair and reasonable as well as the technical quality is unquestionable,” he said.
Inter-Pacific Research head of research Pong Teng Siew said it was not viable for Malaysia to proceed with the initial plan for the ECRL.
“RM10 billion seems more reasonable figure because it will require much lower cost to be viable. However, I think the figure does not include financing cost. Perhaps it may be from a few players who would want to offer this package,” he said.
Pong said Malaysia should carefully review the compensation of cancelling the original project agreement, citing that there would be plenty of payment cost.
“ECRL can be financially viable but economically it could be a net benefit to the Malaysian economy and society as a whole.
“There are spillover effects and this goes beyond the realm of finance. Benefits flowing from this development can be sprung up along the railway lines,” he said, adding that the government normally looked at the social benefit and cost analysis.