‘No special treatment for ECRL’

Many govt projects are granted GST relief, says Tok Pa

KOTA BARU: There is nothing unusual about giving Goods and Services Tax (GST) relief to the East Coast Rail Link (ECRL) project, says Datuk Seri Mustapa Mohamed.

The International Trade and Industry Minister pointed out that many government projects were given GST relief.

“This is nothing out of the ordinary. We do not give special, preferential treatment to certain people,” he told a press conference here.

He was asked to comment on allegations made by Parti Amanah Negara vice-president Husam Musa, who showed documents alleging that the China-owned Communica- tions Construction Company (CCCC) was given GST relief for the ECRL project.

The certificate was accompanied by a letter with CCCC’s letterhead informing its supplier that it was granted GST relief, based on a letter by the Finance Ministry dated Feb 7.

“In fact, some government projects have been given GST relief,” said Mustapa, adding that the claims were made to confuse the public.

“It is the Government’s policy that certain projects will be given GST relief, not just projects from China,” he said.

Barisan Nasional strategic communications deputy director Datuk Eric See-To said the GST exemption granted to CCCC was to avoid “unnecessary processes and expenses”.

“In the ECRL project, the final customer is the Government. If GST is collected, then the Government has to pay GST to the Government. How senseless is that?” he said.

See-To added that since the project was funded through soft loans, GST would raise the total amount of loans and even interest.

Thus, the Government’s decision to “reduce cost and unnecessary expenses for the project” was right, he said.

In a separate post on Facebook, See-To also compared the cost of the Kuala Lumpur International Airport (KLIA) and the ECRL project.

“As a comparison, the RM55bil cost of the ECRL – which will connect the east coast states to Kuala Lumpur and Klang for the first time – is significantly lower and 4.2% of our current gross domestic product (GDP) of RM1.3 trillion.

“This means the ECRL is a more affordable project for Malaysia now compared to KLIA then,” he said.

See-To claimed that the KLIA project in 1993 cost RM10bil, which was 5.8% of the country’s GDP of RM172bil then.

He said that back then, KLIA was financed substantially with a soft loan from Japan and had Japanese, Australian and English contractors.

Prime Minister Datuk Seri Najib Tun Razak, who recently launched the groundbreaking ceremony of the ECRL project here, said the project was a game changer as it would create over 80,000 jobs for locals.

The ECRL, stretching 688km from Port Klang in Selangor to Tumpat in Kelantan, is expected to be completed by June 2024.