Guan Eng says must strike balance between needs and savings

11-Oct-2018 Intellasia | Malay Mail | 6:00 AM Print This Post

Finance minister Lim Guan Eng said Putrajaya must be prudent with infrastructure spending to avoid falling into a so-called austerity trap.

He said while the government has cancelled some projects deemed wasteful due to tight finances, it was not against large infrastructure undertakings per se.

He pointed out that the Pakatan Harapan government was continuing many such undertakings launched by the previous Barisan Nasional administration, and said they contained savings that could still be unlocked.

“These include rail-based public transport projects such as the LRT3 and MRT2. We have every intention of continuing but at no unnecessary and expensive scope, while at a reasonable cost,” Lim said.

He cited LRT3 as an example were costs savings were still possible, noting that the overall costs was brought down to RM16.6 billion from the projected RM31.6 billion with renegotiations.

Others that were outright dubious cannot be continued, he explained.

“Hence the cancellation of projects such as the Multi-Product Pipeline and Trans-Sabah Pipeline which were expected to cost over RM10 billion, of which RM8.5 billion was paid but with under 15 per cent of the works completed,” Lim said during the “Malaysia: A New Dawn” investors conference.

The government ended the two projects along with another pipeline project after the prime minister’s visit to China, citing dubious payment structures as among reasons for the termination.

He said the project owner Suria Sun Energy Resources, wholly-owned by the ministry, is currently in the process of negotiating with the main contractor China Petroleum and Pipeline Bureau to determine the compensation quantum and amount to be refunded to the government.

“What we want is merely to get a bigger bang for the buck, to make sure that every tax-payers ringgit will generate the equivalent value and maximum multiplier effect,” Lim said.

Putrajaya also suspended the East Coast Rail Link for the same reasons, and is believed to be working towards cancelling the project entirely.


Category: Malaysia

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