Malaysia tries crowdfunding to plug ballooning debts

Image via The Malaysian Reserve

Image via The Malaysian Reserve

By GCR Staff0 CommentsIn a surprise decision that will disappoint global engineering firms, Malaysia's new Prime Minister Mahathir Mohamad declared yesterday that he will cancel the multi-billion-dollar scheme to build a high-speed railway between Kuala Lumpur and Singapore.

The International Court of Justice (ICJ) in that same ruling awarded to Singapore Pedra Branca - referred to in Malaysia as Pulau Batu Puteh (White Stone island).

Mahathir, who won a surprise election victory this month against Najib Razak's long-ruling coalition, is seeking to fix the country's finances, which he says deteriorated dramatically after the former government became embroiled in a huge financial scandal.

Najib said the figures were based on the World Bank's financial analysis and report projecting the growth of Malaysia's gross domestic product for this year and over the next few years.

The Prime Minister said that the government had to talk to Singapore about it and the compensation that needed to be paid.

But he said Malaysia will discuss the matter with Singapore.

The Urban Redevelopment Authority's masterplan to turn the Jurong Lake District into Singapore's second central business district had hoped to see the HSR terminus andthe Tuas mega-port help create 100,000 new jobs in the maritime, infrastructure, and technology sectors.

Some Singaporean netizens have expressed disappointment by Malaysia's plans to axe the deal but they also appear to be empathetic to the reasons.

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Mahathir, who was responding to a question about the ICJ challenge, said Malaysia had "already built structures" on Middle Rock.

The Pekan MP said on his Facebook page that the project could also have created 110,000 jobs at the outset, increasing to 442,000 employment opportunities by the same year. "Decisions clouded by emotions will only hurt the people", Najib said. "We'll make no money at all from this arrangement".

"So we can not (be able) to pay so much money if we continue with the project".

"The rakyat voluntarily want to share their earnings with the government to help ease the burden".

Mott MacDonald, and WSP are some of the European and North American companies to have won roles on the ambitious project, which has been the subject of a formal agreement between the two countries since December 2016.

"Although the forfeited amount, for breaking the project agreement with Singapore, is not small to give up, it will speak volumes about Singapore".

He said it was more important for the government to reduce the nation's current debts than to proceed with the project.

He had, in an earlier interview, cited the need to do away with unnecessary projects, one of them being the cross-border HSR, which will cost Malaysia RM110 billion (S$37 billion) and not earn them "a single cent".

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