Daim Zainuddin questions if the ECRL is a loan or investment, with a professor of economics responding that it’s a domestic investment.
Former finance minister Daim Zainuddin has questioned if the RM60 billion East Coast Railway Link (ECRL) project was a form of investment to the country, or if it is actually a loan.
He said if the government has to repay the cost of the project – which reportedly will be funded through a loan from the Export-Import Bank of China – then it is the latter, not an investment like Putrajaya had claimed.
“If it’s true that the project brings in money, then okay. How much investment does it bring (to the country)?
“Does the train (ECRL) bring in money?
“If it’s a loan, it has to be paid back. If it has to be paid back, is that an investment? If you’re an investor, what would you say?
“(You would say) it’s not an investment, it’s a loan.”
Daim was speaking to reporters after a closed-door dialogue session yesterday, urging the government to bring investments into the country so job opportunities will be made available to the people.
He said this is a matter that has to be dealt with immediately, considering the fact that the public, including university graduates, are facing difficulty securing employment.
“Investments are important to create jobs. There are reports stating that many can’t get a job.
“So the government should create an environment where investors will come in, resulting in job opportunities.
“I read a report by Malaysian Trades Union Congress which spoke about retrenchment. So we have to address this issue immediately,” he said.
Certain quarters have expressed concern over investments from China in Malaysia, especially on the aspect of the country’s sovereignty.
Prime Minister Najib Razak, however, has denied such claims, saying the government will continue to protect Malaysia’s independence.
Meanwhile, an academic says the ECRL project is a domestic investment as it is a long-term capital investment into an infrastructure.
Yeah Kim Leng, who is a professor of economics at Sunway University’s Business School, was responding to former finance minister Daim Zainuddin, who had questioned the nature of the project.
Daim said if the government had to repay the cost of the project, which will reportedly be funded through a loan from the Export-Import Bank of China, it was actually a loan and not an investment as claimed by Putrajaya
Yeah, however, said the project was by definition an investment, although not a foreign direct investment (FDI) by China.
“(It is) actually a domestic investment with funding coming from China. That would be a more accurate description of the investment.
“Depending on how the investment is structured, it is most likely a public investment,” he told FMT.
On the question of whether the investment was a good one, Yeah remained neutral.
“We would have to look at the cost benefits and feasibility studies of the investment before that could be determined. Only then would we know if this is a feasible project or not.
“We have to look at the economic and financial feasibility of the project, which should be carried out by the government.”
Yeah said it was also crucial that the commercial, environmental and social perspective of the investment be considered.
“The study should look into the cost-benefit evaluation of the project both from a commercial, environmental and social perspective.
“The project might also have an environmental impact that they would need to look at.”
Prime Minister Najib Razak had described the ECRL as a “game and mindset changer” for Malaysia, saying it would significantly cut travel time to and from the east coast of the peninsula and stimulate economic growth for the East Coast Economic Region (ECER).
The ECRL would also link the key economic industrial areas with the ECER such as the Malaysia-China Kuantan Industrial Park (MCKIP) and Gambang Halal Park in Pahang, Kertih Biopolymer Park (Terengganu) and Tok Bali Integrated Fisheries Park (Kelantan).
Najib said the rail journey from the Integrated Transport Terminal (ITT) in Gombak, Selangor, to Kota Bharu, Kelantan, was also expected to take less than four hours compared with the average eight hours, which could also stretch to over 12 hours during festive seasons.
Critics of the ECRL, however, have questioned its feasibility as well as the project’s cost. – FMT