The Institute for Democracy and Economic Affairs (IDEAS) was responding to remarks from a Japanese economist that Japan could lose out on the HSR as the Chinese government was doing “many things” to subsidise the project.
Gakushuin University’s Prof Motoshige Ito was reported to have said this in highlighting the competition in the infrastructure sector in Malaysia.
IDEAS senior fellow, Carmelo Ferlito said that although the Chinese high-speed rail system is recognised as among the safest in the world, there must be no compromise on the tender process for the HSR.
According to a 2013 New York Times article, Chinese high-speed trains have been proven to be among the world’s safest transportation systems, despite a tragic accident in 2011.
In that accident, known as the “Wenzhou train collision”, one high-speed train smashed into another train that was in front of it, leaving 40 dead and 192 injured.
“When we talk about infrastructure, to compromise on quality means to compromise on safety. What is key is to ensure that safety standards required overseas will be applied here.”
Ferlito said the key to ensuring the best deal was through open competition and a level playing field.
“But the issue of competition between China and Japan for the HSR project highlights the bigger issues related to Chinese investments in Malaysia.”
Ferlito said the various loans from China for long-term investments didn’t come without strings attached, as Chinese projects in Africa have shown.
He said such loans are often related with the need to divert the resources back to Chinese companies to carry out the project.
Generally, said Ferlito, foreign investments create development opportunities for the local economy, but the case of Chinese investments is particularly dangerous because China can get back the money twice.
“First, with the loan repayment and second, because the actual implementation of the projects is entrusted to Chinese companies. This is a ‘new’ type of colonialism, the colonialism of debt.
“Chinese companies usually tend to keep the entire project in Chinese hands. They eat the cake and they do not leave even the crumbs,” Ferlito said.
Project pricing main concern
PKR’s Wong Chen weighed in on the issue, saying that Chinese transport and rail systems are reliable, and also more affordable, resulting in a good “value for money” proposition.
“But we’re very concerned about the pricing of these projects. Are the costs inflated?”
The 350km HSR will cut travel time between KL and Singapore to just 90 minutes, and is expected to cost some RM60 billion.
“We are also very worried about the cost benefit aspect of these projects and whether will we get decent economic multipliers from them or will they become white elephant projects.”
Wong, the Kelana Jaya MP said that his concern with Chinese-led projects was a lack of transparency, which he said Putrajaya also failed to provide.
“I am not convinced about the announced costs and until and unless China acts transparently and discloses the commercial terms, I will remain opposed to them. I have zero expectations on Prime Minister Najib Razak’s administration being transparent.”
Recently, Pakatan Harapan chairman Dr Mahathir Mohamad declared the opposition pact would review all mega projects in Malaysia, should it wrest control of Putrajaya in the next general election, including the HSR and the RM55 billion East Coast Rail Link.