Govt to find ways to lower payment to S'pore for dropping HSR
THE EDGE
Mahathir: The terms and agreement for the HSR are such that if we decide to drop the project, it would cost us a lot of money. (Screenshot from The Edge TV)PETALING JAYA (May 26): The government will find out how it can reduce the amount of money it has to pay to Singapore if it needs to drop the Kuala Lumpur-Singapore high-speed rail (HSR) project, said Prime Minister Tun Dr Mahathir Mohamad.
"The terms and agreement for the HSR are such that if we decide to drop the project, it would cost us a lot of money. We have entered into an agreement with Singapore. If we break the agreement, we have to pay a very large sum of money," he told The Edge weekly.
The 350km HSR will have a proposed seven stops — Bandar Malaysia, Bangi-Putrajaya, Seremban, Melaka, Muar, Batu Pahat, and Iskandar Puteri — in Malaysia, and Jurong East in Singapore.
The HSR, which is worth RM100 billion, and the East Coast Rail Link (ECRL) project, which has a contract value of RM60 billion, are two mega infrastructure projects cited by the 92-year-old premier as funded by a borrowing spree that had swelled the national debt to RM1 trillion.
The ECRL is expected to cost RM92 billion by the time it is paid off due to interest, said Mahathir.
"[Former Prime Minister Datuk Seri Najib Abdul Razak] knew very well that the ECRL, for example, is something we could not afford. It is not going to serve any purpose. It is not going to give us any returns. And yet, he went ahead and decided to build it.
"The government’s debt ceiling before was very much lower. But he [Najib] didn't care. What he did was he formed a body and then they borrowed. And eventually it [the borrowings] comes back to the government to pay," he said.
He called the previous government's attempt to rollout both multibillion-ringgit projects at once as "crazy".
"He didn't seem to think about how we were going to pay for all these," he said.
Mahathir added that the contract for the ECRL is "strange", as the terms state that the contractor must be from China while the borrowings of RM55 billion to fund the project must also come from the country.
Moreover, the funds must also be kept abroad to pay the contractor, who will be paid based on a pre-determined timetable and not progress of work done.
The ECRL is also being undertaken by state-owned contractor China Communications Construction Co Ltd while the loan is being provided by Export & Import Bank of China.
He added that the government will renegotiate the terms of the ECRL.
Details of ECRL project contract ‘not normal’, says Tun M
May 27, 2018, Sunda
Tun Dr Mahathir Mohamad
KUCHING: Prime Minister Tun Dr Mahathir Mohamad has highlighted unusual details surrounding the East Coast Railway Line (ECRL) project.
Money from a RM55 billion loan given out by a Chinese bank – the Export and Import Bank of China (Exim) – for Malaysia to build the ECRL is directly paid to the construction company China Communications Construction Co Ltd (CCCC).
Dr Mahathir in an interview with The Edge said this is not the normal way it is done, as the loan would normally have to be drawn down in Malaysia and paid to the foreign company’s local subsidiary.
“The contractor is from China and the lending is from China.
“And the money is not supposed to come here but (kept abroad) to pay the contractor in China,” he said in the interview.
Dr Mahathir also said that the payments to CCCC were not on the basis of work done, but follows a pre-determined timetable which the Prime Minister said was “also not normal”.
He highlighted suspicions that some money paid for the ECRL was to be used to pay 1Malaysia Development Bhd’s (1MDB) debts and to buy certain companies as The Edge article cited sources revealing that the ECRL contract was inflated by some RM20 billion from when it was signed back in 2016.
It alleged that the extra RM20 billion was used to help 1MDB meet some of its debt obligations and for the purchase of companies linked to Jho Lo.
Dr Mahathir said his government intends to review and renegotiate the terms of the project with the various Chinese parties.
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