THE East Coast Railway Line (ECRL) should be prioritised over the Singapore-linked rail project, said former finance minister Daim Zainuddin, as it can help with the economic recovery.

He said 85% of the RM44 billion ECRL project is being financed by a loan from China’s Exim bank and repayment only begins once the railway line is operational in 2027.

It is also a Malaysian-owned project with 40% local content, which means that local contractors and the businesses will get jobs, said Daim who reviewed the ECRL’s price tag with China.

In comparison, the RM110 billion Singapore-KL high-speed rail (HSR) is more expensive and allows the island republic too much of a say in the Malaysian portion of the alignment.

“If we go ahead with the HSR project later and in accordance with its original conditions, I fear Malaysia will be giving up her sovereignty to Singapore,” Daim said in a recent interview.

“Many are not aware that under the original agreement, Singapore would have equal say over the use of the rail line within Malaysian borders.

“For instance, if Malaysia wants to link the HSR line with the ECRL, Singapore can object and they will, because they know that such a linkage will affect their port industry,” said Daim, who reviewed all mega-projects when he headed the Pakatan Harapan administration’s advisory council.

When PH took over after the May 2018 general election, it reviewed all mega-projects, such as the ECRL and HSR, started during the Barisan Nasional administration.

While serving PH, Daim successfully negotiated to reduce ECRL’s original price tag from RM66 billion to RM44 billion.

The ECRL would create a new railway line from Selangor through Negri Sembilan, Pahang, Terengganu and Kelantan.

The HSR, meanwhile, has been postponed yet again to year-end from the original deferment date of May 31.

The new Perikatan Nasional government said it’s postponing the project to build a 350km high-speed line between KL and Singapore to reduce its RM110 billion price.

In his interview, Daim said it took a lot of effort to renegotiate the ECRL to get a better deal for Malaysia.

“It not only saved the country billions of ringgit but is also better and safer for the country in the long run,” said Daim, adding that there are also fringe benefits.

“Issues like palm oil purchases, investment, joint operations and maintenance, increased local component and other corridor investments were all fringe benefits.”

Unlike the HSR Daim said, the ECRL is “ready to go” and its construction will spur commerce and industry along its alignment.

“The financing terms and long repayment period make the ECRL a prime example of how to utilise cheap foreign financing to aid in the country’s economic recovery.

“This should be treated as a priority project because we still have to pay interest on the amount drawn down by the BN government earlier.

“Whether you continue or you dither, the interest has still to be paid. So, we might as well start on the project as any delay will add further to the costs.

“MIDF Research has indicated that every RM1 spent on rail development brings about output of RM2.05 to the economy. And this is only during construction periods. Multiplier effects from economic activities catalysed by the completed railway will be even greater.

“Timing is key. Further delaying the project would mean being unable to leverage on the expected benefits at the opportune time. As the ECRL does not require government funds to proceed, it should be encouraged instead of being delayed.” – June 17, 2020.