Malaysia's Mahathir to visit China for talks on projects

Malaysian Prime Minister Mahatir Mohamad, second right, speaks to the media at a press conference in Putrajaya, Malaysia, Friday, July 6, 2018. Mahathir says he will visit Beijing next month to renegotiate "unfair" terms for China-backed projects in Malaysia worth more than $22 billion. (AP Photo/Yam G-Jun)
Malaysian Prime Minister Mahatir Mohamad, right, and Deputy Prime Minister Wan Azizah Wan Ismail speak to the media at a press conference in Putrajaya, Malaysia, Friday, July 6, 2018. Mahathir says he will visit Beijing next month to renegotiate "unfair" terms for China-backed projects in Malaysia worth more than $22 billion. (AP Photo/Yam G-Jun)
Malaysian Prime Minister Mahatir Mohamad, center, arrives for a press conference in Putrajaya, Malaysia, Friday, July 6, 2018. Mahathir says he will visit Beijing next month to renegotiate "unfair" terms for China-backed projects in Malaysia worth more than $22 billion. (AP Photo/Yam G-Jun)
Malaysian Prime Minister Mahatir Mohamad speaks to the media at a press conference in Putrajaya, Malaysia, Friday, July 6, 2018. Mahathir says he will visit Beijing next month to renegotiate "unfair" terms for China-backed projects in Malaysia worth more than $22 billion. (AP Photo/Yam G-Jun)

PUTRAJAYA, Malaysia — Prime Minister Mahathir Mohamad said Friday he will visit Beijing next month to renegotiate terms for China-backed rail and gas pipeline projects in Malaysia worth more than $22 billion.

The government has ordered Chinese state-owned companies to suspend work on the $20 billion East Coast Rail Link, a key venture under China's Belt and Road initiative, and two gas pipeline projects pending negotiations.

Contracts for the projects were approved in 2016 by former Prime Minister Najib Razak's government. It was replaced by Mahathir's government following a May 9 election upset.

Mahathir said he will visit China in August since China's president, Xi Jinping, was unavailable this month.

"There are several issues to be brought up, among which is the unfairness of the terms of the contract and also of the loans. The interest is also of concern to us because the interest is much higher than when government borrows. Normally government borrows at 3 percent and below but this one is very high," he told a news conference.

Finance Minister Lim Guan Eng earlier this week said there must be a "drastic" cut in costs for the 688-kilometer (430-mile) East Coast Rail Link, whose cost at 81 billion ringgit ($20 billion) is nearly 50 percent higher than earlier estimated.

The rail link connects Malaysia's west coast to rural eastern states and is largely financed by China.

Lim said the two gas pipeline projects were worth 11.1 billion ringgit ($2.7 billion), nearly 20 percent more than an earlier estimate. He said the government has paid 8.3 billion ringgit ($2.1 billion) to the China Petroleum Pipeline Bureau but it has completed only 13 percent of the work.

China Communication has said it regrets the suspension. It has urged Mahathir's government to "honor and respect" the contract signed by Najib's administration. The indefinite suspension could cause additional costs, losses and damages, the company said.

Mahathir's government has also axed a high-speed rail line to Singapore, deeming it too costly. It is reviewing other large infrastructure projects after finding the national debt has surged sharply, partly due to corruption under Najib's rule.

Najib was charged Wednesday for criminal breach of trust and corruption arising from investigations into alleged graft at the 1MDB state investment fund.

Must Read

Malaysia prepares mass burial for school fire victims

Sep 15, 2017

Malaysian authorities are preparing a mass burial for 23 mostly young boys who died in a fire at a...

Malaysia to pay US firm up to $70M if it finds missing plane

Jan 11, 2018

Malaysia's government will pay U.S. company Ocean Infinity up to $70 million if it can find the...

Faulty Takata air bag kills 6th person in Malaysia

Jan 30, 2018

Japanese carmaker Honda says another person has died in Malaysia after a flawed Takata air bag...

Ex-strongman seeks legacy as savior of Malaysia's democracy

May 11, 2018

Former strongman Mahathir Mohamad was an unlikely choice to steer Malaysia on a more democratic...

AP Interview: Anwar wants Malaysia to scrap race policies

May 17, 2018

Pardoned Malaysian politician Anwar Ibrahim says decades-old affirmative action policies for the...

Weather, 20 December
Houston Weather
+7

High: +11° Low: -2°

Humidity: 83%

Wind: NNE - 7 KPH

Canberra Weather
+27

High: +27° Low: +17°

Humidity: 87%

Wind: W - 20 KPH

Roissy-en-France Weather
+6

High: +6° Low: -5°

Humidity: 87%

Wind: ENE - 7 KPH

Florence Weather
+9

High: +9° Low: +6°

Humidity: 97%

Wind: ENE - 17 KPH

Parga Weather
+7

High: +16° Low: +4°

Humidity: 100%

Wind: SE - 25 KPH

About Us

In Malaysia Corner, we’re here to bring back those days where you can still catch up with everyday news no matter which corner you are at.

Contact us: sales[at]malaysiacorner.com