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Economics, Opinion, Politics

Reconsidering Malaysia’s rail projects

Soon after Pakatan Harapan took over the federal administration, PM Mahathir not only set up the Council of Elders, stepped up investigation of the 1MDB scandal, dismissed politically appointed civil servants and gradually put the PH election manifesto into implementation, another focus was the reviewing of two major infrastructural projects undertaken by the previous BN administration, namely ECRL and KL-Singapore HSR.


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Updated: May 29, 2018

As the two rail projects have been initiated, the new government may have to come up with astronomical sums of compensations if it were to terminate or suspend the projects. To a government already having RM1 trillion debt on its shoulders, this could mean another immense financial burden.

As a matter of fact, these two rail projects are not really white elephants as many would want to believe. Improved infrastructural facilities are utterly essential to catalyze the country’s economic development.

In addition to Port Klang on the Straits of Melaka, the east coast port of Kuantan with a direct rail link to Singapore should constitute a highly strategic “New Golden Triangle”.

Most of the sea traffic for major economic powers such as China, along with other regional trading nations like Vietnam, Cambodia and the Philippines will have to pass the Straits of Melaka to reach the Indian Ocean and the Arabian Sea. Singapore will remain the principal logistic hub while Port Klang is noticeably inferior where geographical location is concerned.

With a direct rail link between Port Klang and Kuantan Port, cargo traffic between South China Sea and Indian Ocean / Arabian Sea, can experience remarkable cost and time savings if goods are transported via the land bridge, not to mention countless job opportunities created along the rail line and meeting the significantly boosted cargo load over the next ten years as the economy along the rail line takes off in a big way.

The ECRL construction is therefore not just a key unilateral trade consideration for China being the financing party, but it will also have positive implications on Malaysia’s economic development.

As for the KL-Singapore HSR project, it not only connects the southern tip of the New Golden Triangle to Kuantan to the east and Port Klang to the west and bring the two major maritime routes on either side of Peninsular Malaysia to easy reach, it may even become an impetus for fresh economic dynamism and business opportunities.

Unfortunately these projects entail an excessively high construction cost and indeed warrant prudent consideration given the massive debt commitments the Malaysian government has to bear at this moment.

In his appraisal of the two projects, the prime minister has raised some doubts over the projects’ feasibility and has even hinted possible cancellation of the projects.

It is hoped that the new government will consider the pros of these projects before making any decision, trying instead to review and reduce the cost.

Given our cordial relationships with both China and Singapore, renegotiating more acceptable deals is absolutely practicable while charting win-win strategies for the countries where private sector is involved.



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Sin Chew Daily
About the Author: Sin Chew Daily is a leading Chinese newspaper in Malaysia and a member of the Asia News Network.

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