SEBERANG JAYA, Penang: Malaysia will make an official announcement on the RM81 billion Chinese-backed East Coast Rail Link (ECRL) project next week, said Finance Minister Lim Guan Eng on Sunday (Jan 27).
Lim’s comments were made one day after Economics Minister Azmin Ali said that the project had been scrapped because of Malaysia’s financial limitations.
“The cost of the ECRL development is too big, so we have no financial ability at this time,” Azmin had told reporters on Saturday.
The country will have to pay an annual interest payment of RM500 million if the project was not terminated, he added.
Lim said on Sunday that it is only proper the announcement be made via a written statement seeing as the ECRL is a massive project.
“The content of the project will be announced next week and I hope the press will not make a mountain out of a molehill … Please wait for the official statement,” Lim told reporters.
He added that the Chinese embassy in Malaysia has been informed of the date of the official announcement.
READ: Chinese-backed East Coast Rail Link, pipeline projects cancelled for now: Malaysia PM Mahathir
Malaysia has in recent months suspended several major projects signed under the country’s previous scandal-plagued regime, in a bid to cut the country’s massive RM 1 trillion debt.
The ECRL project was the centrepiece of China’s infrastructure push in Malaysia but work has been suspended pending discussions over pricing and graft accusations.
The 688km rail linking Port Klang and Kota Bharu was launched in 2017 and slated for completion in 2024.
Malaysia’s previous government under Prime Minister Najib Razak had warm ties with China and signed up to a string of Beijing-funded projects.
But critics say many of these deals lacked transparency, fuelling speculation they were made in exchange for help in paying off debts from a massive financial scandal involving state fund 1MDB.
READ: Malaysia to scrutinise China contracts after report of inflated deals struck to cover 1MDB debt
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The scandal was a major factor in Najib’s shock electoral defeat in May last year that saw his former boss Mahathir Mohamad return to power.
Mahathir then ordered a review of mega-projects signed by Najib during his nine-year rule, adding he would discuss “unfair” terms supposedly set in these deals and high interest rates levied on Chinese loans used to finance the projects.