Awas : ECRL a debt trap?
The Malaysian govt announced it is proceeding with the ECRL railway project from Port Kelang to K Bahru, sticking to the original northern alignment, whereas the PH govt amended it to the southern alignment to by-pass Selangor bcos the PH said the southern route is shorter and therefore cheaper.
So it’s good news to the construction and materials manufacturing industries bcos the Rm 50 billion ECRL project will have a big knock-on effect on downstream activities. A writer in The Star said yesterday, in a project like the ECRL, we shd evaluate it from a national perspective, not just the financial cost and returns analysis. Fair enough. But who is financing it? Is it China’s EXIM bank or the China Reconstruction and Development Bank (?)? Both are Chinese govt entities . As such, we have to be careful not to end up like the harbour project in Sri Lanka or the East African highway project — as their govt could not afford to pay back the loans, the Chinese Exim bank took over the land in exchange.
We must ask our govt to spell out the financing details on the ECRL before we get trapped under the China Exim Bank loan. China’s One Belt One Road Initiative can end up as a debt trap. Let’s be careful.