In a statement today, the Petaling Jaya MP hit out at the finance ministry over its grounds for awarding the project to China Communications and Construction Company (CCCC) instead of giving local firms the opportunity to tender for the project.
Responding to Pua’s question last week, the ministry said the decision had been made in order to qualify for financing offered by the Export-Import Bank of China (China Exim Bank).
“The (finance) minister said that China Exim Bank offered a soft loan to Malaysia for the project at low interest rates. He added that the loan, for a period of 20 years, also allows for a grace period of seven years where the government does not need to repay the principal,” Pua said, quoting the ministry’s reply.
“In addition, ‘the government has, in principle, agreed at least 30% of the infrastructure work will involve local companies and contractors’.”
Pua, who is also DAP national publicity secretary, said this was no reason for projects to be awarded.
“Is the real ‘quid pro quo’ the fact that CCCC will help launder part of the astronomical profits to pay off 1MDB debts as widely speculated?” he asked.
He added that government-appointed consultant HSS Integrated had earlier estimated that the cost of the 600km project would be less than RM30 billion.
“Just because somebody is willing to lend you the money at seemingly favourable terms does not mean that you should accept the condition to select the product that will cost nearly double the estimated price.
“To pay for the project at RM55 billion just because China Exim Bank offered an ‘attractive financing package’ is absolutely scandalous.”
Pua also slammed the 30% quota for local companies and contractors, saying Malaysia had already built double tracking railway projects, dug award-winning tunnels and constructed the MRT.
He said the finance ministry had even advised government-linked companies to halt overseas investments and repatriate foreign funds to check the ringgit slide.
Bank Negara had also taken measures to force private companies to convert their foreign currency receipts into ringgit, he said.
“However, the government clearly doesn’t practise what it preaches because the overwhelming bulk of the inflated RM55 billion cost will be paid to China despite available local options.
“Malaysia now appears so desperate for foreign financing for its so-called national interest projects that it is willing to subject itself to terms and conditions of foreign powers.”