Following is an article adapted from NST Online complete with responses by TTF (in blue):
KUALA LUMPUR: The government would be saddled with a RM130 billion debt if the East Coast Rail (ECRL) project is implemented on current terms and conditions.
Prime Minister Tun Dr Mahathir Mohamad said: “If we continue with the project, we would need to borrow as much as RM60 billion.
“To pay back then we have to pay with interest, and that will take us about 30 years.
“In 30 years’ time, the amount added to the interest would reach more than RM100 billion and, some have even estimated that it could reach about RM130 billon.
“That is why we cannot afford this project.”
TTF: That’s a lie.
To understand why that is, let’s take things right from the top.
On the 5th of January 2019, TTF wrote:
On the 25th of June 2018, The Third Force revealed that Tan Sri Vincent Tan had snapped up 22.2 million shares belonging to Syarikat T7 Global (T7), an oil and gas service provider that entered a bid for the project. Not long after, the GoM threw a bolt from the blue by announcing that the project, called off previously for being too pricey, was back on track at an added value of RM15 billion. Vincent then agreed to foot the difference by procuring soft loans from banks belonging to Daim. But China rubbished the whole thing as it made no sense whatsoever to renegotiate terms when the original deals were working fine.
So, to make the project appear more viable, Daim undertook to ‘rationalise’ the whole affair by quietly bundling parts of the construction into a new contract. The contract, yet in the pipeline, is set to be handed over to Vincent Tan through subsidiaries belonging to the Tan Sri Syed Mokhtar al-Bukhary owned AlBukhary Corporation Sdn Bhd. The rationalisation is supposed to bring the cost of the original project down by about RM25 billion with a small portion of the difference meant to compensate contractors for delays. However, the compounded cost of the two projects – the ‘scaled-down’ version and the one in the pipeline – is anticipated to be worth RM80 billion, 20 billion upstream of the initial RM55 billion cost.
See the scam?
Had Mahathir not interfered, the actual cost of the East Coast Railway-Link would have been an estimated USD13.1 billion as agreed upon by the Government of Malaysia (GoM) with the state-owned China Communications Construction Company Ltd (CCCC).
However, due to the stop work order issued by the GoM, many contractors and sub-contractors involved with the project suffered huge losses which the Chinese government estimates is worth anywhere between USD1.5 to 2 billion.
As we speak, smaller players linked to those contractors are finding it difficult to bear the losses and have even resorted to ceasing operations altogether.
On the 24thof August 2018, I wrote:
The Star Online put the number of workers retrenched as a result of the stop work order at 1,000 people. Quoting unnamed sources, the report alleged that the suspension affected a significant number of Chinese expatriates and senior executives who The Third Force was told were skilled and paid millions in compensations. An industrial source familiar with the matter, when met, related that the contractors also paid massive amounts in deposits for three year-long blanket orders to anticipate a rise in construction material costs.
Still, no matter what the penalty may be for all the delays, the GoM will most definitely not bear a RM130 billion debt as claimed by Mahathir given that the soft loan package approved by China’s EXIM Bank came with extremely generous interest terms.
The only possible way interests could bloat is if Daim himself gets what he wants by convincing China to involve his own banking network.
But let’s put Daim aside for the moment.
I sometimes wonder where Mahathir plucks all these extravagant figures he dishes out to reporters from.
Remember the “RM42 billion from 1MDB” that was supposed to have dissipated into thin air?
Do you ever hear him or any other Pakatan leader talking about it anymore?
NST Online continued…
Speaking to reporters at the Parliament lobby, here, today, he said the government might need to postpone the implementation of certain parts of the project to lower costs.
“If we look again at the project and find that some parts are not really necessary, we may not for example need the double tracking (portion).
“We can postpone half of the construction or implement part of it at a later date, when it is required.”
TTF: That’s another lie.
Truth is, Mahathir wants the project cost to balloon so that he can slice it up into smaller pieces to make the core project appear cheaper.
He will then get his cronies to take up the remaining parts of the project.
As a matter of fact, Daim has already promised Dato’ Dr Rameli Musa several supply contracts for the double-tracking portion of the project and proposed to China that Ingress Corporation Berhad be brought into the picture.
Thanks NST Online continued…
He also indicated that the negotiations would take time.
“The government has appointed Tun Daim Zainuddin as the special envoy of the prime minister to head the ECRL negotiations with China for a win-win solution.
“The outcome of the negotiations will be announced when finalised in future.
“If the negotiations are fruitful, the government is confident the ECRL project will continue on an appropriate scale, which will benefit the people and save Malaysia from being burdened by huge debts.”
TTF: Negotiations have never been fruitful.
On the 5th of January 2019, TTF wrote:
When Mahathir sought a US40 billion loan from EXIM to offset losses in GST revenue suffered by the GoM and to pay contractors compensations, Xi Jinping was dumbstruck. The Chinese president quickly pointed out that the idea of using money borrowed from China to pay China made no sense whatsoever and reminded Mahathir that the latter’s administration had repeatedly questioned China’s business ethics. Xi then shot down Mahathir’s offer for China to embark in deep sea drilling with the Syed Mokhtar owned Melati Pertiwi Sdn Bhd. Mahathir had intended for the offer to be a quid pro quo of sorts, hoping that the Chinese president would agree to renegotiate terms of the ECRL and gas pipeline projects.
But it was a firm “no.”
Both Xi and Li Keqiang made it absolutely clear that China would go by terms agreed upon by the previous Barisan Nasional administration and wouldn’t budge an inch. Xi then gave Mahathir two months to reconsider his position on all ventures without specifying the penalty involved should Malaysia dilly-dally further. Mahathir ignored the ultimatum and went about business as if nothing had happened. A furious Xi has since convened a meeting with Li and Chinese Foreign Minister Wang Yi to discuss the possibility of imposing some trade sanctions on Malaysia. Xi is determined to seek compensation from the GoM and is set to review China’s position on the Mahathir administration.
NST Online continued…
Dr Mahathir was replying to a question from Datuk Seri Dr Ismail Mohamed Said (BN-Kuala Krau) on the status of the ECRL project and whether the government would continue the project.