The Straits Times says in its report “If the price is right then ECRL may go ahead, says Malaysian PM Mahathir”, “The cost of building the East Coast Rail Link (ECRL) is too much for Malaysia under the current circumstances. Given this, Prime Minister Tun Dr Mahathir Mohamad said, there were two options for the country, which was either to bring down the cost and proceed when the price was right or to postpone the implementation of the project.”
I said in my post “China’s Major Belt and Road Project in Malaysia to Remain” on February 22 that China has three alternatives to bypass the Malacca Strait and the railway through three countries Laos, Thailand and Malaysia to the western coast of Malaysia is but one of the alternatives. Kra Canal is perhaps the best geographically but China may not own it for return of its huge investment in the canal. Therefore the rail link through Myanmar to Kyaukpyu, Myanmar at Bengal Bay is perhaps the best alternative as it is shorter and goes through only one country. In addition, China has already built oil and gas pipelines from China to Myanmar’s Kyaukpyu. The three- year survey China conducted for building the pipelines will facilitate the construction of a railway parallel to the pipeline.
Now China has concluded an agreement with Myanmar on building a deep sea port at Kyaukpyu, it will certainly be able to build the railway as Myanmar has greater need for the railway but has to rely on China for funds and technology in building the railway. As a result the major Belt and Road project of ECRL in Malaysia is not so important for China though it facilitates China’s trade with Laos, Thailand, Malaysia and other Southeast Asian countries.
I pointed in my previous post the great benefit ECRL will bring to Malaysia:
The railway will facilitate the development of Malaysia’s underdeveloped areas. It will benefit Malaysia much more than China. That precisely proves the benefit of China’s Belt and Road initiative that provides much needed funds for developing countries in building the infrastructures indispensable for their economic development.
That is why Mahathir says that if the cost of ECRL can be reduced to the level affordable to Malaysia, he will proceed with it. Otherwise he will resume the project later when Malaysia can afford it.
The report says that Mahathir blames his predecessor for having incurred too heavy debts so that Malaysia cannot afford ECRL now. It is very clear that China is not to blame.
The report points out that China is cooperative in the negotiations for the reduction of the cost of the project.
Comment by Chan Kai Yee on Straits Times’ report, full text of which can be viewed at https://www.straitstimes.com/asia/se-asia/if-the-price-is-right-then-ecrl-may-go-ahead-says-malaysian-pm-mahathir.
October 26, 2018
SHANGHAI (Reuters) – China’s total fixed asset investment in transport infrastructure hit 2.28 trillion yuan ($327.77 billion) from January to September this year, up 1.4 percent from a year earlier, according to government data published on Friday.
China is increasing infrastructure spending in order to boost its slowing economy. The value of fixed-asset investment projects approved in the third quarter of this year hit 437.4 billion yuan, more than four times the amount during the April-June period, according to Reuters calculations.
According to a briefing by the Ministry of Transport, China’s spending on high-speed highways reached 702.6 billion yuan, up 12 percent on the year, though much of the increase was offset by declines in investment in rural road infrastructure.
China has promised to boost its railway freight capacity in order to ease traffic congestion and pollution. The ministry said rail freight volumes rose 7.9 percent in the first three quarters, with deliveries of coal by rail rising around 10 percent.
Rail still only accounted for 8.1 percent of total freight, which amounted to 37.74 billion tonnes over the period, up 7 percent on the year.
China said in July that it would boost the volume of goods delivered by trains by as much as 30 percent by 2020, noting that trucks produced 13 times more pollution per unit of cargo than trains.
Reporting by David Stanway; Editing by Gopakumar Warrier
Source: Reuters “China spends $328 billion on transport infrastructure from January to September: ministry”
Note: This is Reuters’ report I post here for readers’ information. It does not mean that I agree or disagree with the report’ views.
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