The federal government’s planned review of large-scale projects is timely and greatly important to ensure that Malaysia doesn’t suffer from a one-sided deal and fall into a debt trap, reported the Sun Daily.
Recently, Prime Minister Tun Dr Mahathir Mohamad and his newly appointed Finance Minister Lim Guan Eng announced that they will look into big-ticket transactions and renegotiate them if needed.
These include the East Coast Rail Link (ECRL) and the High Speed Rail (HSR) that will connect Singapore with Kuala Lumpur.
A review will determine if a project was awarded transparently as some contracts handed out appear to be questionable, said Senior research fellow at the Malaysian Institute of Economic Research Dr Shankaran Nambiar.
“There have been claims that these projects were slated with a bill that is far above the market value; that is not acceptable.” He is also urging the authorities to put in place a standard practice for scrutinising tenders of government projects.
“Going further, aggrieved parties should have the right to question why they are not awarded projects. If these processes are put in place as standard practice, we can be sure that leakages and inefficiencies will be weeded out. This problem gets complicated in the case of projects coming from China.”
Moreover, Mahathir’s review of mega projects doesn’t mean he doesn’t like Chinese investments. It’s just that he doesn’t want a disadvantageous deal for Malaysia.
“His statements on the review of mega projects may sound alarming, but they should be viewed as a more careful evaluation of projects that will benefit Malaysia in the long run.”
“I see this as a positive, although the immediate consequence would be one that generates uncertainty. I think there will be more confidence from investors who will be evaluated on the basis of what they can bring to the country than for the political deals that can be offered,” he added.
In agreement is Sunway University Business School Economics Professor Dr Yeah Kim Leng, who said the review is timely and crucial to prevent the country from borrowing too much for certain large-scale projects.
Image sourced from SPAD.com.my
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