Malaysia scraps China-backed East Coast Rail Link plan over price
- Economy minister Azmin Ali admitted the government could not afford hefty interest rates demanded by high-profile ‘Belt and Road’ project
- Official insisted Kuala Lumpur would ‘still welcome all forms of investment from China’, but consider them on a ‘case-by-case basis’
Malaysia’s government has decided to cancel a US$20 billion rail project being built and financed by China after failed attempts to lower the price, a minister said on Saturday, ending months of speculation about the future of the controversial project.
Economic Affairs Minister Azmin Ali said Prime Minister Mahathir Mohamad’s government made the decision to scrap the East Coast Rail Link (ECRL) at a cabinet meeting this week.
The minister’s comments on Saturday – a recording of which was made available to This Week in Asia – are the clearest indication yet that the Malaysian government has reached a final decision on the 688km rail link after expressing an interest in cancelling the project last May.
It was to have been built by the China Communications Construction Company and 85 per cent financed by the Export-Import Bank of China.
Saturday’s comments contrasted with the previous pronouncements of Malaysian officials, including Mahathir, who had hedged their positions by suggesting the project could still continue even though they preferred for it to be axed.
There also appears to be differences within the cabinet on the matter, as Finance Minister Lim Guan Eng reacted to Azmin’s comments by suggesting the decision was not final.