SHAH ALAM, Selangor: Cancellation of the Kuala Lumpur-Singapore High-Speed Rail (HSR), East Coast Rail Line (ECRL) and trans-Sabah gas pipeline projects can help reduce the government’s debt burden by more than RM300 billion, Malaysian Prime Minister Mahathir Mohamad said on Monday (Oct 22).
These projects were too costly to be funded by the government, he added.
"In the past, if we were to execute plans, we made sure that we had enough money," he said during an appearance on a talk show.
"If we did not have enough money, we determined how much was the debt level (and) how much could be repaid from the return on investment; that’s the best way."
He said that this principle was not practised by the previous government, accusing it of incurring huge debts to carry out mega infrastructure projects without considering the ability to repay them.
The current government only scrapped projects after ascertaining that doing so will not hurt Malaysians, he added.
He cited the ECRL project as an example, where money was borrowed on the condition that a foreign company would be given the contract.
Said the prime minister: “Foreign workers were brought in, while equipment and tools were all made by a foreign country. So what do we get? We’ve got nothing.
“If we were to cancel these projects, the victims are their workers are not ours. So, we cancelled them so that we do not have to pay huge debts."
Turning to the topic of a third national car project, Dr Mahathir believes it would spark Malaysians’ interest in engineering and manufacturing.
“A car has 4,000 parts. If we want to make a car, we have to know about designing, testing, parts and quality. We have to learn all these," he said.
"When a nation controls engineering knowledge, its people will go forward."
After returning to power, Dr Mahathir has moved to cancel a number of projects, including the Chinese-funded US$20 billion ECRL and the trans-Sabah gas pipeline.
He also announced shortly after Pakatan Harapan’s election victory that the HSR project would be scrapped entirely, saying that the rail will not benefit Malaysia.
He later said in July that the project would be deferred instead.
Singapore and Malaysia formally agreed to postpone the construction of the HSR on Sep 5, after the new Malaysian government, through its Minister of Economic Affairs Azmin Ali, made an official request to Singapore to defer the project by three or four years.