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ECRL avoided a debt trap. Now a viable infrastructure project.

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I think we are reading ECRL’s latest news on an hourly basis. Everyone’s talking about it and we have one prominent foreigner writing about it in Forbes. For those who need more references, here’s one latest one by Edgeprop.my: China will help shoulder ECRL’s operational risk. As the title had suggested, it spoke about how the operations and maintenance will now be jointly managed by both Malaysia and China instead of just Malaysia as per previously. There’s even one in South China Morning Post on Malaysia selling more palm oils with this new agreement though as our PM Tun Dr. Mahathir has pointed out that there’s no writing agreement on this but it will definitely be one of the things which Malaysia will talk about to China. We have another one which praised Malaysia’s success in this renegotiation.

Article in nst.com.my here. Long Island University Post’s Economics Department chairman Panos Mourdoukoutas, in an opinion piece for Forbes said that new East Coast Rail Link (ECRL) project deal is a big win for Prime Minister Tun Dr Mahathir Mohamad. It said that Malaysia has done something which other nations such Sri Lanka, Pakistan, and the Philippines did not: bring China back to the negotiating table to cut the cost of the projects assigned to Chinese contractors. He shared that many of China’s infrastructure projects around the world were not economically viable because it was built at inflated costs and left the countries heavily indebted to Beijing. Do read here for the full article in nst.com.my

Actually I have read about some of these projects. I seriously do not think the projects would have worked whether it’s at inflated costs or not… Remember yeah, beyond just infrastructure, the country itself must be ready to take advantage of what was being built… Merely building it does not work. This is also why I write before that ECRL should not be cancelled because this is an important infrastructure project which will bring benefits to all the towns along the route. One very real benefit? Kuantan Port is now connected to Klang port. Shipping lines could now use either port interchangeably and for Klang port, this will help it grow its total TEUs which will be helpful in attracting more shipping lines. Now, let’s move forward and make sure everything is ready by 2026 yeah. Happy following.

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<Featured Image is courtesy of Stock Photos from Danial Abdullah>

written on 16 April 2019

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