KUALA LUMPUR (Jan 28): With slowing economic growth and mounting concern over RM1 trillion worth of public debts, conflicting statements over the weekend from two top Malaysian ministers over the fate of the RM81 billion East Coast Rail Link (ECRL) project have, worryingly, highlighted that there could be too many cooks in the proverbial kitchen of Malaysia’s financial and economic affairs.

It started when Prime Minister Tun Dr Mahathir Mohamad told reporters last Thursday after returning from an overseas trip that he was “not sure” and “not aware” if the ECRL contract had been terminated, adding that the cabinet would discuss the matter that same day.

Then on Saturday, amid strong speculation that the cabinet had terminated Chinese contractor China Communications Construction Co Ltd’s (CCCC) contract to build the ECRL, Economic Affairs Minister Datuk Seri Mohamed Azmin Ali confirmed that the country would not go ahead with the project.

Mohamed Azmin said the cabinet made this decision because the cost to develop the ECRL is too big and the government does not have the financial capacity to do it. The interest on the project alone, he revealed, cost about half a billion ringgit a year. “We cannot afford to bear this, so this project needs to be terminated without affecting our good relationship with China,” he was quoted as saying.

Finance Minister Lim Guan Eng expressed shock at Mohamed Azmin’s statement later that same day. “Datuk Seri [Mohamed] Azmin was not in the last cabinet meeting. So I’m acting under the instruction of Tun [Dr Mahathir] and the cabinet. I think a statement will be issued next week lah. A statement will be issued, if necessary, next week, okay? As I said I’m acting under the instructions from Tun,” he said.

But in the next breath, he amended his statement. “Sorry, I wouldn’t say that Datuk Seri [Mohamed] Azmin wasn’t in the cabinet meeting. What I meant was that he wasn’t privy to the decision made by Tun. So I think I was also shocked seeing his announcement but maybe that’s the stand. Nevertheless, I think a statement may be issued, subject to instructions from Tun,” he told reporters.

When pressed on whether Mohamed Azmin was at the cabinet meeting or not, Guan Eng said: “I don’t want to say it like that lah. Later, all sorts of unhealthy speculation will arise. I only said maybe he was not informed of the PM’s wishes, but regardless, I will act on Tun’s instructions. And, if necessary, one announcement will be made next week, officially.”

An ‘old-timer’ speaks up
The episode prompted Home Minister Tan Sri Muhyiddin Yassin to urge his colleagues to not make conflicting statements regarding the project. He was also reported as saying on the same day that he was not aware the ECRL had been cancelled, though he was present at the cabinet meeting on Thursday.

“I think the finance minister or the prime minister are better qualified to explain. The project is not under my portfolio. To prevent further confusion, it would be best for me not to comment. I leave it to the discretion of the minister responsible to make the announcement.

“It is best that there be no conflicting statements from other Pakatan Harapan cabinet ministers. I speak as an old-timer,” he said.
Naturally, the Barisan Nasional opposition, fired up after a strong win for their candidate at the Cameron Highlands by-election on Saturday, had a field day poking fun at the Pakatan Harapan administration over the two ministers’ statements.

Yesterday, Guan Eng urged the media during an event in Penang not to “make a mountain out of a molehill” over the issue of the conflicting statements and to wait for the official statement from Putrajaya. He also said the Chinese embassy had been informed of the date of the upcoming announcement.

Guan Eng also clarified that his previous response to Mohamed Azmin’s statement was not about the project itself, but rather the timing of his announcement. “What I said yesterday was about the timing. The cabinet has decided that a statement should be made next week. That’s what I was referring to, not the content of the project,” he was quoted as saying.

After the exchanges, it is safe to say no one has been left any the wiser about the ECRL’s future. Some Malaysians also took to the web to express their frustration over the confusion.
It did not help that the project was announced to be cancelled “for now” after Dr Mahathir visited China last August, but then later said to be under review as the government was in talks with CCCC on the project’s fate. As recent as last Tuesday, government adviser Tun Daim Zainuddin was saying Malaysia was still in talks with China over the project. Work on the ECRL has been suspended since July last year.

The contract with CCCC, inked during BN’s administration in 2016, is under the purview of the finance ministry.

In an unprecedented move, however, Dr Mahathir created an economic affairs ministry, where parts of the ministry of finance’s (MoF) portfolio had now been parked, on returning as the seventh prime minister after the national polls last May.

While there may have been confusion previously over which ministry oversees which part, it has been made clear in January that Mohamed Azmin is in charge of 32 agencies, including MyHSR Corp Sdn Bhd, under which another megaproject — the Kuala Lumpur-Singapore high-speed rail — is parked. But the ECRL remains under the MoF, specifically under the Minister of  Finance Inc’s subsidiary, Malaysia Rail Link Sdn Bhd.

While Dr Mahathir is obviously in charge as prime minister in this “kitchen”, the sequence of events over the past week shows there is a danger of too many cooks wanting to look at this particular ECRL “broth” and making confusing comments about it. While everyone may have good intentions, no one can rule out the likelihood the broth may be spoilt with too many cooks at the helm.

Already, the Pakatan administration, with its mostly young and untried team of cabinet members, have been flip-flopping in its decision-making in the past eight months that did little to inspire confidence. Its changing stance on the National Higher Education Fund Corp or PTPTN’s loan repayment issue, how much employers have to fork out for foreign workers’ levy, and the Unified Examination Certificate are examples that come to mind.

Putrajaya would do well to heed what the Socio-Economic Research Centre (SERC) said just over a week ago: step up efforts to provide clarity and certainty in policies, or risk dampening growth.

“My wish is for the government to provide policy certainty, clarity and consistency. That is the first thing [that is needed] to set a stable environment. Whatever [happens] externally is beyond our control, but then you have to anticipate the challenges that could impact the economy,” SERC executive director and chief economist Lee Heng Guie told a media briefing on Jan 17.

This article first appeared in The Edge Financial Daily, on Jan 28, 2019.

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