Asia Malaysia Malaysia revives massive Chinese rail project

Malaysia revives massive Chinese rail project

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Malaysia said Friday a major Chinese-backed railway had been revived following a deal to cut costs, lifting a suspension slapped on the project when a corruption-plagued regime lost power last year.

The railway was among several infrastructure projects in Malaysia supported by Beijing but put on hold after the shock defeat of a coalition that had ruled the country for six decades.

Critics said the projects lacked transparency, could saddle the government with debt, and were in reality aimed at quickly funnelling money to former leader Najib Razak to help him pay back cash looted from a sovereign wealth fund.

After months of negotiations between the Malaysian and Chinese governments and the companies involved, a new agreement was reached to resume the East Coast Rail Link, the Malaysian prime minister’s office said in a statement.

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The cost of the rail link, which will connect Malaysia’s east and west coasts, was reduced to 44 billion ringgit ($10.6 billion dollars) from its original price of 65.5 billion ringgit, it said.

“This reduction will surely benefit Malaysia and lighten the burden on the country’s financial position,” said the statement. Malaysia’s new administration inherited a mammoth national debt.

The project is seen as a key part of Beijing’s Belt and Road global infrastructure drive.

Najib was toppled in large part due to allegations that he and his cronies looted billions from state fund 1MDB, and spent it on everything from yachts to pricey artworks. He went on trial over the scandal last week.

He was defeated at the polls by 93-year-old veteran politician Mahathir Mohamad, who was earlier premier for 22 years.

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