KL to proceed with $2.7b bridge to Thailand
KL to proceed with $2.7b bridge to Thailand
KUALA LUMPUR (AFP): Construction of a 10 billion ringgit
(US$2.7 billion) land bridge to southern Thailand will go ahead
despite a weakening ringgit, Malaysian Prime Minister Mahathir
Mohamad said yesterday.
Mahathir described the bridge as "very viable" and a way to
reduce congestion in the Malacca Straits, one of the world's
busiest waterways passing between Malaysia, Indonesia and
Singapore.
The proposed bridge would link northern peninsular Malaysia,
the northeast Langkawi resort island and southern Thailand with
roads, railways and gas pipelines.
"We plan to build a land bridge so that we don't have to go
down and up the Straits of Malacca," he was reported as saying by
Bernama news agency at Langkawi.
The proposed bridge would also help avoid oil spills in the
strait and save the hassle and the money needed to clean up the
mess, he added.
The project will be carried out jointly with Indonesia and
Thailand.
"The fact that our ringgit has depreciated does not mean that
we cannot build this land bridge," Mahathir said.
The Malaysian ringgit sank to a new low of 3.7300 to the US
dollar late Thursday before recovering to close Asian trading at
3.7050. The local unit had tumbled more than 40 percent since
regional turmoil erupted in July.
Analysts said the bridge project was badly timed given the
region's currency crisis which has forced Indonesia, Thailand and
South Korea to seek multi-billion-dollar bailouts led by the
International Monetary Fund (IMF).
"The project may make some sense but the timing is way off.
Where is the money going to come from? I doubt if Thailand will
agree to it," said the head of research at a local brokerage who
declined to be named.
A senior analyst with a foreign brokerage described Mahathir's
comments as "political talk" and said he doubted if the project
would be implemented.
"Funding is going to be a major problem. The region is facing
a liquidity crunch and both Indonesia and Thailand have received
bailout packages led by the IMF," he said.
"The project may also not be economically viable considering
the cost of loading and unloading and the amount of manual
workers needed to operate the railways and port efficiency may
not be adequate," he added.
One local research chief dismissed rumors that news of the
bridge project contributed to continued falls in the ringgit.
"The market has got wind of it already. It is widely known and
would not have any impact on the ringgit," he said.
The research chief declined to comment on the viability of the
project as no information was given.
"We really don't know the details of it like the companies
involved, the returns on investment ... No one can make any
sensible comments except to say that it is bad timing," he said.
"The issue here now is not in the projects but in the
credibility of the government," the frustrated research chief
added.