Chinese engineering firm told to suspend US$20 billion East Coast Railway Link in Malaysia

Owner puts project on ice, raising uncertainty about future of key part of China-funded infrastructure development plan

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Women look at a model of a train designed to run on Malaysia’s East Coast Rail Link in this file image. The owner of the US$20 billion project has told its main Chinese contractor to suspend work on it. Photo: Xinhua

Published: 9:40pm, 4 Jul 2018Updated: 3:50pm, 5 Jul 2018

The project owner of Malaysia’s US$20 billion East Coast Railway Link has told its main Chinese contractor to suspend work, both companies said on Wednesday, raising uncertainty about the future of part of China’s “Belt and Road Initiative”.

The 688km (430-mile) rail link is designed to connect the South China Sea off the east coast of peninsular Malaysia with strategic shipping routes to the west, and is a major part of China’s trade and infrastructure development plan that stretches across Asia and beyond.

The suspension comes as Kuala Lumpur is seeking to renegotiate the terms of the deal with Beijing.

Since a surprise election victory in May, Malaysia’s new government has pledged to cut the national debt, stamp out corruption and review major projects agreed by the scandal-plagued previous administration led by Najib Razak. Najib was formally charged on Wednesday with corruption linked to a multibillion dollar financial scandal that contributed to his election defeat.

Najib Razak (third from left), then the prime minister of Malaysia, looks at a model of the East Coast Rail Link during the project’s launch in September last year. AP Photo

Financial news outlet The Edge first reported the halt in the rail link project, referring to a letter sent from Malaysia Rail Link Sdn Bhd (MRL) to China Communications Construction Company (CCCC) that cited grounds of “national interest” among other reasons.

A spokesman for MRL confirmed the instruction but declined to comment further.

Chinese engineering firm told to suspend US$20 billion East Coast Railway Link in Malaysia

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Owner puts project on ice, raising uncertainty about future of key part of China-funded infrastructure development plan

Owner puts project on ice, raising uncertainty about future of key part of China-funded infrastructure development plan