Pakatan allege that the East Coast Rail Link project (ECRL) may suffer the same fate since there is a soft-loan from China.
There has been recent propaganda from the opposition using the recent 99 year lease given by the Sri Lanka government of its Hambantota port to a Chinese company in order to reduce their debt to China - further alleging that this is risk to the sovereignty of the country as Chinese warships may sail there.
Pakatan allege that the East Coast Rail Link project (ECRL) may suffer the same fate since there is a soft-loan from China.
Such comparisons may scare those who are less knowledgeable but once you appreciate the differences, you will laugh at their propaganda.
For one, Chinese warships won't sail on the ECRL and since there is no such thing as war-trains, there is little to fear.
Also, what Mahathir supporters do not emphasis is that the port is on a 99 year lease to the Chinese -not a permanent transfer of ownership. This is not much different to Mahathir leasing 54,000 acres of land in Johor to Singapore for 72 years in an agreement he signed in 1990.
But no one accused Mahathir of "selling the country" then.
Secondly, the Hambantota port itself is a giant white elephant and was part of the Sri Lanka's government failed effort to develop an entirely new city called Hambantonta city in the Hambantota region 240km away from Colombo.
The Sri Lanka Government only gives the population of Hambantota City as 11,200 people in 2001. Recent estimates may indicate as many as 50,000 people staying there now. Even Kepong has more people than this.
Have a look at the current Google Map to see how small the place is.
Other than the port, the Sri Lanka govt also built the Mattala International Airport there and is frequently called the world's emptiest international airport.
https://www.cnbc.com/2017/12/13/india-and-china-rivals-compete-for-control-of-empty-sri-lanka-airport.html
That is why Hambantonta port struggles to attract any ships or traffic - making it a big loss-making venture every year.
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The Sri Lanka govt would face huge challenges to make this port in the middle of nowhere a success.
Compare this to the ECRL which will provide much needed freight and passenger services to the east coast states of Malaysia with millions in population.
On top of that, the Sri Lanka govt got into debt trap as they had a debt-to-GDP ratio as high as 86.9% compared to 50.7% for Malaysia.
But what made it many folds worse for Sri Lanka is that 43% of their debt is denominated in foreign currency versus just 2.5% for Malaysia.
Since 97.5% of Malaysia govt debt is in Ringgit and we control the Ringgit, we will not run into the same problem as Sri Lanka.
Sri Lanka's FOREX reserves are also low at US$5.12 billion as at March 2017 as compared to the US$102.2 billion reserves that Malaysia has.
On top of that, Sri Lanka runs both a continuous trade deficit and current account deficit as compared to surpluses that Malaysia enjoys - hence Sri Lanka would have problem increasing their FOREX reserves
As previously mentioned, the RM55bil ECRL project cost is not really that high if you consider that it is to be paid over 20 years installments and taking into consideration that the size of Malaysia's economy is RM1.3 trillion right now.
In fact, Petronas alone has cash balances of RM129 billion today while EPF has RM780 billion - meaning that Malaysia is more than capable of funding the ECRL project without foreign assistance if it wanted to.
Therefore, there is simply no comparison between Sri Lanka's situation with the Hambantota port and our ECRL project.
Don't be mislead by the opposition.
Eric See-To.
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