Once a contract is signed, sealed and delivered, it becomes a formal legally-binding contract. Nobody can violate or breach the terms and conditions of the agreement. Well, actually it can be violated, it you could flex your muscle like military superpower America. You play dirty by accusing the other party of violating the contract, even if they didn’t.

 

That was how President Donald Trump scrapped the Iran nuclear agreement. Calling the 2015 agreement engineered by his predecessor, Barack Obama, as a “bad deal”, Trump openly violated the multilateral nuclear deal by accusing Iran of violating and lying about its nuclear program, despite no evidence of the Iranian violating the agreement.

 

But who dares retaliate against the mighty U.S.? Likewise, even if the ECRL (East Coast Rail Link) agreement was designed to be heavily lopsided, thanks to former Prime Minister Najib Razak, do you think the new Prime Minister Mahathir Mohamad dares violating the contract without paying any compensation? At most, the 93-year-old premier could only bark and condemn it as a “bad deal.” But that’s all he could do.

Who is Malaysia to challenge China, when even the U.S. is having problem persuading the Chinese to behave, stop forcing the transfer of technology and IP (Intellectual Property) and open up the mainland’s massive market to the American corporations? If China wishes to, they could easily bring down the Mahathir government with a simple boycott against the country’s palm oil.

 

What the Mahathir administration could do, however, was to re-negotiate for a better ECRL deal, which was successfully done after influential billionaire Robert Kuok pulled some strings in Beijing, leading to the dramatic 9 months of talks between Daim Zainuddin (former Finance Minister and Special Envoy to PM Mahathir Mohamad) and Beijing.

 

Those who accuse the new Pakatan Harapan government of being a coward for allowing the multi-billion project to proceed obviously have no idea how the global politics work. Malaysia is not in the same league of nations or organizations like the U.S., Russia, European Union or China. Sure, critics were correct to argue that Malaysia can bring the unfair ECRL agreement to an arbitration tribunal.

But even if Malaysia could prove that the nation has been cheated by the Chinese, it would take years. In 2016, when the International Court of Justice in The Hague ruled in favour of the Philippines on an arbitration case brought against China over the legality of China’s Nine-dash line in South China Sea, Beijing simply rejected it while nobody – including the U.S. – dares to enforce the verdict.

 

In the dispute of the Nine-dash line, China forcefully declares South China Sea as their private lake. However, in the event Malaysia triggers an arbitration accusing China of cheating, the international tribunal will hear how the ECRL agreements were signed and sealed willingly and happily by the previous Malaysian Government – without having a gun pointed at then-PM Najib Razak’s head.

 

Yes, the original lopsided ECRL contract was signed and sealed by the moronic government of Najib Razak. When the former Malaysian leader irresponsibly agreed to the bad deal and witnessed the signing ceremony together with his counterpart Li Keqiang at the Great Hall of the People in Beijing in 2016, he has effectively opened the Pandora’s Box. And it cannot be closed.

To make matters worse, the original ECRL contract came with a mind-boggling termination penalty – RM21.78 billion. Adding salt to injury, a whopping RM20 billion on the project cost had already been paid, being the payment for 20% of the phase one of the project. If the Mahathir administration were to cancel the project, RM42 billion would go up in smoke.

 

After the details of the re-negotiation ECRL deal was announced on Monday (April 15), Najib has not dared dispute the RM21.78 billion termination penalties, proving that he was guilty of pushing the country into a debt-trap just so that he could secretly pocket the RM30 billion to bail out his 1MDB scandal. Amazingly, the despicable former premier has continued to lie.

 

Taking to his Facebook, Mr. Najib has instead mocked the Pakatan Harapan government of lying when the coalition had promised to cancel ECRL if the opposition wins the 14th General Election, only to proceed with the project anyway. He deliberately omitted the part about the RM21.78 billion termination penalties – well hidden secretly – until the shocking contract terms were discovered by the new government.

Of course, he didn’t tell his gullible Facebook followers how the local participation in the ECRL project has been raised to 40% in respect of civil works, from 30% in the original deal. Neither did he reveal how his fetish for tunnels would destroy the Klang Gates Quartz Ridge and the nation’s silica reserves – the longest pure quartz dyke in the world.

 

He whined, cried and bitched to his Facebook followers that the revised cost of RM44 billion was made possible because the rail link will be reduced from 688-km to 640-km and the number of stations will be decreased. Which part of the newly re-negotiated “RM68 million per km” against Najib’s original “RM98 million per km” construction cost that he does not understand?

 

Najib specifically targets the joint venture company to be formed between Malaysia Rail Link (MRL) and China Communications Construction Company Ltd (CCCC), with each having an equal stake of 50%. He insisted that Malaysians have the capabilities to manage the entire rail system, and does not need the Chinese company’s involvement at all.

Well, Najib is the same genius who had plunged the Malaysia Airlines into financial bankruptcy, despite injecting RM6 billion and cutting 6,000 jobs, not to forget the hiring of two foreigners (Christoph Mueller and Peter Bellew) to manage the national carrier. From 2015 to 2017 alone, the struggling airline registered a loss of RM2.4 billion despite the RM6 billion bailout.

 

The MRL-CCCC joint venture is not merely about managing the rail system. The primary juice of the joint venture is about operation and maintenance (O&M) of the East Coast Rail Link (ECRL). The Chinese company will provide technical support and share the operational risk after the project’s completion, without which China might dump inferior infrastructure and products.

 

No contractors will sell low quality products knowing they will bear 50% of the cost of repair, labour and operational. If the local experts could not even manage the country’s national carrier profitably, requiring three bailouts to the tune of RM30 billion, does Najib really think they could handle the operation and maintenance of a RM44 billion ECRL, without asking for handouts again and again?

The main purpose of the joint venture is to reduce the risk of the government (MRL) in the event the project goes haywire. In the insurance industry, this is called “reinsurance”. Described as “insurance for insurance companies”, reinsurance is a process when multiple insurance companies share the risk by purchasing insurance policies from other insurers to limit their own total loss in case of disaster.

 

It’s pretty amazing that Najib’s ignorant Facebook followers believe the Mahathir government has sold out ECRL to China unnecessarily, when the disgraced Najib was the same man who had sold a 49% stake in Proton to China-based Zhejiang Geely Holding Group Co. in 2017. But unlike Proton who desperately needed a strategic partner, ECRL can be prevented had Najib not stolen money from 1MDB.

 

Other Articles That May Interest You …

• How Najib Almost Got Away With RM21.5 Billion, Until Mahathir Govt Negotiated A New Brilliant ECRL Deal With China
• 3 Bailouts Involving RM30 Billion – Here’s Why Malaysia Airlines Should Be Shut Down Or Sold Off
• Superpower China Will Not Allow ECRL To Be Scrapped, And There’s Nothing Malaysia Can Do
• Without Billionaire Robert Kuok, Mahathir May Not Get China’s Approval To Cancel Najib’s Wasteful Projects
• Mahathir Is Moving For The Kill – Scraps RM110 Billion HSR Project, And There’s Nothing Singapore Can Do
• Sending A Message To China – Here’s Why Mahathir’s Visit To Japan Is A Brilliant Strategy
• The Dragon Has Landed – China Kick-Off Defence Triangle Via ECRL Malaysia
• Bandar Malaysia Has Become “Bandar China” – The U.S. & Malays Conned By Najib

Tweet

April 17th, 2019 by financetwitter

If you enjoyed this post, what shall you do next? Consider: