The Jho Low factor in the ECRL talks


  • Business
  • Saturday, 02 Feb 2019

Located in the coveted Bird Streets on a pie-shaped promontory known as the Crown, the 1.2-acre complex was famously owned by Jho Low.

Can we do business with China when the fugitive is believed to be in that country?

IRONICALLY, the decision to place the “on-off-on and now uncertain” East Coast Rail Link (ECRL) project in the hands of the governments of Malaysia and China comes just ahead of the start of the trial of former Prime Minister Datuk Seri Najib Tun Razak.

When such contracts go to the level of heads of government, the scope of negotiations is beyond financials and economics of the project. There are other elements involved.

What are some of these elements that could possibly be on the negotiating table in the talks between Malaysia and China?

It has to go beyond China buying more crude palm oil, or Malaysia seeking more investment commitments from China.

This is because the smart money goes to places where the returns are the highest, irrespective of government-to-government negotiations. Moreover, companies from China are already relocating their operations to the region, following the trade war with the United States and the rising cost of manufacturing in China.

Malaysia has not benefitted as much as Vietnam from the relocation of the companies from China so far.

But that cannot be a priority for Prime Minister Tun Dr Mahathir Mohamad to the extent that he decided to handle the negotiations himself.

Outside the scope of trade, finance and economics, there is one sticking point in the relations between Malaysia and China that cannot be swept under the carpet. It is about fugitive businessman Low Taek Jho, or better known as Jho Low.

Many believe Jho Low is somewhere between Taiwan, Macau and China. Dr Mahathir himself has said that he believes Jho Low is in China.

Malaysia does not have an extradition treaty with China. There is an Interpol red alert on him and several others related to the elaborate scam to defraud 1Malaysia Development Bhd (1MDB) of RM30bil. However, so far, nobody on the Interpol list has been arrested.

Hence, would China helping Malaysia to nab Jho Low be a part of the negotiations?

If Jho Low is brought back to Malaysia, it would strengthen the government’s case not only against Najib and others, but also in the claim against Goldman Sachs.

Najib has, amongst others, blamed the “system” for the billions taken out of 1MDB, while Goldman Sachs has said “sorry” without admitting any liability. Jho Low has been named as the central figure in the 1MDB fraud, an accusation he has vehemently denied.

However, the 93-year-old Prime Minister has made 1MDB and the role played by Najib and Jho Low in defrauding the fund as his platform to lead the new government in Malaysia. 1MDB is the epitome of mismanagement of public funds in the hands of a wrong government.

So far, nobody in Malaysia has served a custodial sentence for the 1MDB fraud. Several are facing charges and the trial against Najib starts this month.

It is the most important case for Attorney-General Tommy Thomas. The prosecution needs as many witnesses as possible who are involved in the case to avoid any break of evidence to enhance their chances for the government to secure a custodial sentence.

Also, the ECRL project is already riddled with questionable payments. There are reports which stated that the project was inflated by some RM30bil so that some funds can be made available to help plug the hole in 1MDB and that China was part of the deal.

China has denied any suggestions that its companies in the rail project are related to helping resolve 1MDB’s financial troubles.

Jho Low has also got into the act by denying that China had agreed to help bail out 1MDB in return for the lucrative ECRL contract. Towards this end, Jho Low issued a statement through a public relations firm and has denied his involvement in 1MDB, the ECRL project and China’s purported role to bail out the beleaguered fund.

It’s perplexing that Jho Low came out to defend the ECRL and China when he has so many other bigger issues to contend with at the moment.

The fact that the ECRL is highly inflated cannot be denied because the main contractor – China Communications Construction Company Ltd (CCCC) - has agreed to complete the entire rail stretch from Port Klang to Pengkalan Kubor in Kelantan for about RM45bil.

This is a reduction of almost one-third of the cost of the ECRL that has been estimated at RM65bil.

CCCC has also given other concessions related to the project, such as an increase in work for local companies and the sharing of risk in the operations of the ECRL railway line.

Previously, Tun Daim Zainuddin, who does not have any official role in the government but has somewhat been given the task of handling the ECRL negotiations, had played a role in the negotiations on the ECRL. Going forward, it is not known if Daim would still play a role.

But what we do know is that Dr Mahathir has taken on the task himself.

It is difficult to predict Dr Mahathir’s strategy, but one thing is for sure - he thinks carefully before making any statements. He would not have taken the stance to handle the ECRL himself if he did not have a plan in mind.

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Business , shan , feb , 2 , ecrl , jho low

   

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