The rail and two pipeline projects alleged to be scams to cover up 1MDB scam.
Economist KS Jomo said today the RM81 billion East Coast Rail Link (ECRL) project should be cancelled, adding it appeared to be an effort to cover up issues related to the 1MDB scandal.
He claimed the ERCL project was “designed to profit certain parties with a possible aim of covering up the lies and losses” of the infamous 1MDB scandal.
Jomo said that as a member of the Council of Eminent Persons (CEP), he had learned that the situation surrounding the China-backed rail project was “really bad”.
He hinted that there was much more than met the eye with the project but declined to elaborate for now as negotiations between Malaysia and China were going on.
While delivering a speech at a luncheon event today, Jomo said two pipeline projects were also part of such efforts.
Last year, Finance Minister Lim Guan Eng had revealed that a company with links to controversial businessman Jho Low was paid RM8.3 billion or 88% of the contract’s worth despite completing only 13% of the work to build the two pipelines.
Jomo was speaking on ‘New Malaysia: The Role of the Media’ organised by the Malaysian Press Institute at the Hotel Majestic in Kula Lumpur.
His statement comes a day after the prime minister announced that the project was a burden to the Pakatan government and cancelling it might be a better alternative despite the compensation it would have to pay.
However, Mahathir said his government had yet to decide whether to scrap the ECRL.
Critics of the ECRL alleged that the project, valued at RM55 billion by the previous Najib Razak administration, was part of a bailout plan to cover-up 1MDB’s financial losses.
Najib and Beijing have denied such speculation.
Speaking to reporters after the luncheon, Jomo reiterated his old stance that the ECRL was not beneficial and it was better for Malaysia to cut its losses.
Commenting on the suggestion that cancelling the project might upset ties with China, Jomo said the issue was complicated and the government needed time to iron it out.
However, he dismissed the view that scrapping the ECRL would be a blow to development in the east coast of Peninsular Malaysia.
“This is a lie by those who want to save the project,” he said.
He added that there were other things that needed to be developed in the east coast states like Kelantan, such as water supply, sanitation and flood mitigation.
He further said Putrajaya must realise that the ECRL would not aid in developing the east coast’s transportation system as expected. He said planes would be better.
Earlier report: Jan 25, Cabinet to Terminate ECRL Project