Its deputy director, Eric See-To, said there was no basis for comparison between the project and the Hambantota deep-sea port in Sri Lanka, which was recently handed over to a Chinese firm as part of a debt settlement between Sri Lanka and China.
He said fears aired of ECRL possibly suffering the same fate as Hambantota and that Chinese warships may sail to the Indian Ocean port were laughable.
“Such comparisons may scare those who are less knowledgeable. But once you appreciate the differences, you will laugh at their propaganda,” he said in a Facebook post.
See-To said while the failed port, a legacy of former Sri Lankan president Mahinda Rajapaksa’s regime, was struggling to attract traffic, the ECRL would provide much-needed freight and passenger services to states in Peninsular Malaysia’s east coast with “millions” in population.
He said that the fast-growing KTM ETS service already serves 3.6 million passengers a year, and suggested that the ECRL would be equally successful.
Pointing out that unlike Malaysia which runs surpluses, Sri Lanka runs persistent current account and trade deficits. See-To also said Sri Lanka’s foreign exchange reserves were low at US$5.12 billion (RM20.79 billion) as at March 2017 compared with Malaysia’s US$102.2 billion (RM415.08 billion) at the end of November.
“But what made it many folds worse for Sri Lanka is that 43% of their debt is denominated in foreign currency versus just 2.5% for Malaysia. Since 97.5% of Malaysian govt debt is in Ringgit and we control the Ringgit, we will not run into the same problem as Sri Lanka.” added See-To.
On Dec 21, PPBM supreme council member Tariq Ismail had said the prospect of Malaysia being “under China’s economic thumb” was scary, following reports about Hambantonta having been given to the Chinese over non-payment of debts incurred by Colombo for the project.
On Dec 17, former finance minister Daim Zainuddin had also questioned if the ECRL was a form of investment to the country or if it was a loan.
He said if the government had to repay the cost of the project, then it would be a loan and not an investment like Putrajaya had claimed.
Minister in the Prime Minister’s Department Abdul Rahman Dahlan, who is BNSC director, had responded by saying that although the government had chosen the financing path for the ECRL project, it would still retain full control over the project.