ECRL likely an attempt to cover up 1MDB scandal, says Jomo

(FMT) – Former Council of Eminent Persons (CEP) member KS Jomo said today the RM81 billion East Coast Rail Link (ECRL) project should be cancelled, adding it appeared to be an effort to cover up issues related to the 1MDB scandal.

He claimed the ERCL project was “designed to profit certain parties with a possible aim of covering up the lies and losses” of the infamous 1MDB scandal.

He hinted that there was much more than met the eye with the project but declined to elaborate for now as negotiations between Malaysia and China were going on.

While delivering a speech at a luncheon event, Jomo said two pipeline projects were also part of such efforts.

Last year, Finance Minister Lim Guan Eng had revealed that a company with links to controversial businessman Low Taek Jho was paid RM8.3 billion or 88% of the contract’s worth despite completing only 13% of the work to build the two pipelines.

Jomo was speaking on “New Malaysia: The Role of the Media” organised by the Malaysian Press Institute at the Hotel Majestic in the city centre.

Jomo’s statement comes a day after the prime minister announced that the project was a burden to his government and cancelling it might be a better alternative despite the huge compensation it would have to pay.

However, Mahathir said his government had yet to decide whether to scrap the ECRL.

Speaking to reporters after the luncheon event, Jomo, who is an economist by profession, said the ECRL was not beneficial, reiterating his old stance on the controversial China-linked project.

“The ECRL project is not beneficial. For me, it’s better for us to cut our losses but it’s not that easy,” he said, adding that going ahead with the project would incur bigger losses in comparison with the compensation to be made for terminating it.

Reiterating that this was his personal view, Jomo said: “To protect the country’s finances, it is better for the authorities to be united in meeting with the other parties involved… and maximise what can be saved.”

Jomo said he was not aware of “things he knows now” about the ECRL during his tenure as a member of the CEP last year. However, he declined to elaborate, terming the details as “private”.

“Our bargaining position will only be strengthened if there are things that are kept secret (and for) meetings with other parties. That is why I do not want to discuss this at length at this stage. Perhaps when this is all settled one day, I will elaborate.”

Commenting on the notion that cancelling the project might upset ties with China, Jomo said the issue was complicated and the government needed time to iron it out.

He further said Putrajaya must realise that the ECRL would not aid in developing the east coast’s transportation system as expected. He said planes would be better.

“There are other problems that should be given greater attention to, so to say (abandoning the ECRL) will neglect the east coast, that is a trick used by certain parties to save the ‘fake project’,” he explained.

Jomo pointed to Mahathir’s statement yesterday that the ECRL contracts would cost Putrajaya more than RM100 billion. However, he expected the entire project to be costlier as according to him the estimate was only for the first phase.

The 688 km project, which is expected to connect Port Klang, Selangor, with Pahang, Terengganu and Kelantan, will have 28 stations. It will offer passenger and cargo rail services, and is expected to be completed by June 2024, if realised.