Malaysia's Mahathir to visit China over lopsided projects

Howard TerryJul 07, 2018

East Coast Rail Link will connect the South China Sea in the east coast of Peninsula Malaysia with strategic shipping routes in the west and is a major part of China's infrastructure push across Asia and beyond.

Najib's close relationship with China, which has been pouring billions of dollars into Malaysian infrastructure and real estate, has now come under the spotlight.

Yesterday, Finance Minister Lim Guan Eng had announced that the ECRL cost is actually RM81 billion and in order for the project to proceed, costs must be reduced first.

The government also says it will halt pipeline projects.

Najib is under investigation for alleged theft and money-laundering at the 1MDB state investment fund, and has been barred from leaving the country.

Song Seng Wun, a regional economist with CIMB Private Banking, said the latest suspensions could prompt some investors to hold back.

According to the Financial Times, Malaysia Rail Link, the government company supervising the East Coast Rail Link, sent letters to CCCC and CPPB on Wednesday, informing them of the project's suspension due to excessive costs. It has urged Mahathir's government to "honor and respect" the contract signed by Najib's administration.

CCCC said no duration was given for the suspension and that it could spark additional costs, locsses, and damages.

"We hope to reduce costs a lot, because of a lot of wrong things [are] being done", he said at a news conference in June, referring to the East Coast Rail Link and the billions Malaysia would have to borrow from China to finish it.

Prime Minister Mahathir Mohamad, who took office May 10 after his Pakatan Harapan coalition scored an election upset over Najib's Barisan Nasional coalition, has been an outspoken critic of Malaysia undertaking projects that require borrowing from China.

"The terms are very damaging to our economy", he said at the time. "Under the situation we have no choice but to adhere to the suspension instruction", it said.

"We expect that the ECRL project will only become financially and economically feasible if there is a drastic price reduction of the project by the CCCC", Lim said in a statement. In May, Mahathir postponed plans to build a high-speed rail link between Singapore and Malaysia, which had been agreed on several years ago, saying it was too costly.

In addition to the ECRL, the finance ministry yesterday confirmed that two pipeline projects awarded in 2016 to China Petroleum Pipeline Bureau, together worth $2.3bn (9.4 billion ringgits), had also been suspended, The Edge Markets reports.

Related Articles:



« Previous article
Next article »


Popular Pages

In Moscow, US senator hopes for "new day" in US-Russia ties
The Russian envoy is pushing the US government to take a new approach to its treatment of Russia. Interested in Russia Investigation? The question of Ukraine is also expected to come up.

United States jobs growth stronger than expected
More than 600,000 workers joined the economy last month, bringing the total labor force participation rate to 62.9 percent. Following the report, USA stock turned positive after having been in red figures ahead of the report.

Brazil's Danilo out of World Cup with ankle ligament injury
It's been a brilliant, dramatic tournament so far, and the last-eight looks likely to follow suit. Or if they can't get past the home team, they will be the latest Croatia team to fall short.

Zlatan Ibrahimovic Backs Sweden To Win The World Cup
I was at Palace when they weren't quite as good as they are now. They do things together and work extremely hard. They are really important messages for us.

Belgium coach Martinez "proudest man on earth" after toppling Brazil
This should be an exciting game to watch, as it'll pit Belgium's relentless offense against Brazil's impenetrable defense. Brazil came back again and finally replied when Augusto guided home a header from Coutinho's expertly-floated cross.

Belgium players with yellow cards unlikely to face England
Others - perhaps with more hands-on experience in such matters - placed greater emphasis on maintaining momentum. Why we are starting to plot which would be a better venue for our semi-final is beyond me.

Sweden's strength is our unity, says bullish skipper Granqvist
Croatia haven't got bundles of pace in their team and Russian Federation will be hard to beat, just like they were against Spain. Every Swedish person in the world is proud and we will be proud however it goes in the coming games".

Thailand boat accident: Death toll climbs to 27 and dozens still missing
The death toll in a boat accident off Thailand's southern coast has risen to at least 33, Thai authorities said Friday. The Thai Navy, marine police and local fisherman are cooperating in the search and rescue efforts.

Thunder just trying to figure out how to get rid of Carmelo
Anthony recently opted into the final year of his contact with Oklahoma City, which was set to pay him $27.9 million next year. Additionally, Melo didn't get along with Houston head coach Mike D'Antoni when both were with the New York Knicks .

Anthony Bourdain Leaves Most of His Money for Daughter in Will
In 2013, Peabody Award judges honoured Bourdain and " Parts Unknown " for "expanding our palates and horizons in equal measure". All this and not much more was revealed after the celebrity chef's will was filed Thursday in Manhattan Surrogate's Court.