Malaysia's Mahathir to visit China for talks on projects

Leroy Wright
July 6, 2018

The main Chinese contractor of the East Coast Railway Link received instructions from the project owner yesterday that it is to suspend all works.

The 688-km (428-mile) ECRL will connect the South China Sea off the east coast of peninsular Malaysia with the strategic shipping routes of the Straits of Malacca to the west.

The premier's visit will likely be preceded by a trip to China this month by 80-year-old former finance minister Daim Zainuddin, two sources and local media reports said.

'The decisions are exclusively directed towards the related contractors relating to the provisions mentioned in the agreements, and not at any particular country, ' Lim said, in an apparent attempt to allay concerns that Beijing was being singled out.

Yesterday, in a separate statement to the Hong Kong stock exchange, CCCC said it "will take initiative to protect its legitimate rights and interests as a general contractor for design and construction pursuant to the contractual terms of the ECRL Project".

The announcement by the foreign ministry came a day after Najib was criminally charged in a Kuala Lumpur court following his arrest on suspicion of corruption linked to 1MDB, a state investment fund he started in 2009.

The new government of Mahathir Mohamad, elected by a surprise result on 9 May, has been running the rule over major infrastructure schemes initiated by the scandal-plagued Najib government.

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Malaysian finance minister Lim Guan Eng has said he planned to visit China soon to renegotiate the terms of the deal and said in a statement on Tuesday that the ECRL would only become economically feasible if there was a drastic reduction in costs.

Mahathir's announcement came at the same time the government canceled plans to build a bullet train between Kuala Lumpur and Singapore.

Daim had in May said all mega-projects in the country would be reviewed by the council and recommendations presented to the government.

"So we can't accuse Saudi Arabia, unless of course, there is proof that Saudi Arabia has tried to interfere in Malaysian politics", Dr Mahathir was quoted saying. "While the duration of the suspension has not been specified, we are concerned about incurring additional cost, losses and damages arising from the suspension. Under the situation we have no choice but to adhere to the suspension instruction", it said.

"We hope that both sides will be able to find a win-win solution through honest negotiation with good will".

The China Petroleum Co.is the firm contracted for the pipeline projects.

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