Malaysia’s special economic council chairman Tun Daim Zainuddin has described the RM55 billion previously announced total cost for the East Coast Rail Link (ECRL) project as inaccurate, reported New Straits Times.
This comes as the RM55 billion represents only the cost for the project’s first phase, while the cost for the second phase stands at RM11 billion.
“If you take into account interest rates and all, it would probably be much more.”
He revealed that 85 percent of the project will be financed by a soft loan from Chinese Exim Bank, while the remaining 15 percent will be funded by sukuk programmes via local banks.
In a bid to have a better picture of the state of the country’s finances, economy and key projects, the council had conducted more than 40 meetings with different government-linked investment companies (GLICs), government-linked companies (GLCs), trade unions, senior government officials and ECRL operator Malaysia Rail Link Sdn Bhd.
Its findings and recommendations will then be presented to Prime Minister Tun Dr Mahathir Mohamad and his Cabinet.
Commenting on the possibility of a negative credit rating after zero-rating of goods and services tax (GST) from 1 June, Daim explained that he is “not very concerned about credit ratings. We were downgraded before, in 1998.”
In fact, credit rating agencies previously handed out high ratings for subprime securities in the US prior to the 2008 financial crisis, he said.
His statement comes after Moody’s Investors Service had said that the new government’s plans to abolish GST will be credit negative for Malaysia, if it is implemented without adjusting measures.
Image sourced from NST Online
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