Tariq Ismail Mustaffa was referring to Rahman dismissing Daim’s question on whether the multi-billion ringgit project was an investment or a loan.
Rahman had turned the tables on Daim and quizzed if “he and PPBM would be happier if foreigners own and operate the ECRL instead?”
“I don’t know what scares me more, the thought of being under China’s economic thumb, or the surprising ‘intellect’ of the minister in charge of the EPU?” Tariq said.
He added that Daim was merely seeking clarification because the term “foreign direct investment” (FDI) and “long term loan” has been used interchangeably pertaining to the RM55 billion ECRL project.
“Clarification was sought so risks can be adequately assessed and the correct representation made.
“As the minister in charge of the EPU, Rahman should know this logic and should have responded professionally.”
Tariq, who is the grandson of the country’s former deputy prime minister, the late Tun Dr Ismail Abdul Rahman, referred to a recent report about a port in Sri Lanka having been given to the Chinese government over the non-payment of debt incurred by Colombo for the project.
“Perhaps you should read up on what happened in the case of Sri Lanka’s port in Hambantota. As a result of the inability to service their loans to China, Sri Lanka had to give up equity share to China, effectively handing over control of the port to China.
“So, for this current regime to go on record to say by merely taking this long term loan from China and retaining 100% ownership of the project, will ensure we retain our sovereignty while mitigating the foreign exchange risk speaks of bad strategic and risk management at best,” he said.
‘Full control of ECRL project’
Rahman had said that although the government chose the financing path taken for the ECRL project, it would still retain full control over the project.
“The Sri Lanka example shows that owning a project in debt is not sufficient to protect one’s sovereignty,” Tariq said.
He also took aim at Rahman’s remark that the ECRL was a “domestic investment funded with a soft loan from China with favourable rates that are lower than the government’s cost of funds”.
“If the project is undertaken as a domestic investment and not FDI, and considering China will play the role of funder, developer and project manager with exclusive control over resources and deployment, then what direct benefit will the project provide the locals other than a short-term capital gain over sale of land to the consortium?”
Tariq added that he also did not foresee a spillover effect to the country’s gross domestic product (GDP) as such projects typically would.
“Let’s not even talk about the transfer of technology and skills such projects typically deliver.
“Instead, the massive loan from China will significantly increase the government’s contingent liabilities, which are already considerable due to 1MDB and stands at double digit percentage of the national expenditure,” he said.
Considering all of the above, Tariq said it was natural for most people to be concerned over how the government would structure this mega-project such that it enhanced and guaranteed the country’s financial position, social well-being, future growth and most of all, sovereignty without further burdening the rakyat.