• Sunday, May 31, 2020
  • Last Update : 06:56 pm

Malaysia's Mahathir seeks China's understanding on scrapped $20bn rail deal

  • Published at 10:17 pm January 29th, 2019
Malaysia's Prime Minister Mahathir Mohamad at an interview with Reuters in Putrajaya, Malaysia on June 19, 2018 Reuters

Since winning power last May, Mahathir has repeatedly vowed to renegotiate or cancel what he calls “unfair” Chinese projects authorized by his predecessor

Prime Minister Mahathir Mohamad on Tuesday asked for China’s understanding over Malaysia’s plan to cancel a $20-billion rail project that spearheads China’s infrastructure push in the Southeast Asian nation, saying Kuala Lumpur could not afford it.

Since winning power last May, Mahathir has repeatedly vowed to renegotiate or cancel what he calls “unfair” Chinese projects authorized by predecessor Najib Razak, whose near-decade long rule ended in electoral defeat amid a massive financial scandal.

The cabinet has decided to cancel the contract with China Communications Construction Co Ltd (CCCC) for the East Coast Rail Link project, economic affairs minister Mohamed Azmin Ali said last week.

“We seek understanding from the parties concerned,” Mahathir told reporters yesterday, adding that Malaysia was burdened with “heavy debt” and could not afford the project, one of the biggest signed in China’s signature Belt and Road initiative.

“It is not because we want to frustrate or throw out the contract, it is because we are really tight in terms of finance.”

The contract may cost the country more than 100 billion ringgit ($24.33 billion) in total, Mahathir said, adding that Malaysia would still have to pay a cancellation fee.

“The huge compensation is not as huge as the amount of debt we will carry for the next 30 years.”

The government was still determining how much to pay CCCC as cancellation fee, Azmin said last week. Government officials have previously said the project cost had been inflated.

In Beijing this week, Chinese foreign ministry spokesman Geng Shuang said he was unaware of the project cancellation.

On Tuesday, Mahathir said an official statement is to be issued in the next few days, with the finance ministry to provide a detailed explanation soon.

In August Mahathir had said the project would be cancelled “for now”, but the government later said it was in talks with CCCC on the future of the rail line.

Mahathir has blamed Najib’s administration for taking total government debt and liabilities to more than 1 trillion ringgit, including that of scandal-plagued state fund 1MDB, which is being investigated for corruption in at least six countries.

blogger sharing button blogger
buffer sharing button buffer
diaspora sharing button diaspora
digg sharing button digg
douban sharing button douban
email sharing button email
evernote sharing button evernote
flipboard sharing button flipboard
pocket sharing button getpocket
github sharing button github
gmail sharing button gmail
googlebookmarks sharing button googlebookmarks
hackernews sharing button hackernews
instapaper sharing button instapaper
line sharing button line
linkedin sharing button linkedin
livejournal sharing button livejournal
mailru sharing button mailru
medium sharing button medium
meneame sharing button meneame
messenger sharing button messenger
odnoklassniki sharing button odnoklassniki
pinterest sharing button pinterest
print sharing button print
qzone sharing button qzone
reddit sharing button reddit
refind sharing button refind
renren sharing button renren
skype sharing button skype
snapchat sharing button snapchat
surfingbird sharing button surfingbird
telegram sharing button telegram
tumblr sharing button tumblr
twitter sharing button twitter
vk sharing button vk
wechat sharing button wechat
weibo sharing button weibo
whatsapp sharing button whatsapp
wordpress sharing button wordpress
xing sharing button xing
yahoomail sharing button yahoomail