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Malaysia to cancel $20 billion China-backed rail project: minister

KUALA LUMPUR (Reuters) – Malaysia’s economics apportion pronounced on Saturday a nation will cancel a $20 billion East Coast Rail Link (ECRL) plan with executive China Communications Construction Co Ltd (CCCC).

Mohamed Azmin Ali pronounced during a media eventuality that a project’s cost was too great, while also giving an declaration that Malaysia would acquire investment from China on a box by box basis.

“The cupboard has done this preference given a cost to rise a ECRL is too large and we don’t have (the) financial capacity,” pronounced Azmin.

The supervision was still final how most to compensate CCCC for a plan termination fee, he said.

The seductiveness on a plan alone amounted to half a billion ringgit ($120 million) a year.

“We can't means to bear this, so this plan needs to be consummated though inspiring a good attribute with China.”

Malaysian Prime Minister Mahathir Mohamad pronounced final Aug that a rail plan would be canceled “for now”, though a supervision has given pronounced it was in negotiations with CCCC on a rail line’s future.

He also announced in Aug a termination of another China-backed project, a healthy gas tube in a East Malaysia state of Sabah.

CCCC did not immediately respond to a ask for criticism from Reuters by phone and content message.

Since entrance into energy final May, Mahathir has regularly vowed to renegotiate or cancel what he calls “unfair” Chinese infrastructure deals certified by his prototype Najib Razak, whose near-decade prolonged order finished in electoral better amid a large financial scandal.

The ECRL plan was a centerpiece of China’s infrastructure pull in Malaysia though work had been dangling tentative discussions over pricing and swindle accusations.

Malaysia’s financial apportion pronounced final year that a cost of a ECRL plan had been inflated, according to internal financial journal The Edge.

The ECRL plan is one of a biggest China has sealed underneath a signature Belt and Road initiative, as good as one of state-owned executive CCCC’s largest railway projects.

In November, a U.S. China Economic and Security Review Commission released a news ranking a ECRL as a second-largest Belt and Road plan by estimated cost, behind a $21.4 billion Moscow-Kazan high-speed railway plan in Russia.

Reporting by Joseph Sipalan; Additional stating by Brenda Goh in SHANGHAI; Writing by Emily Chow; Editing by Simon Cameron-Moore and Tom Hogue

Article source: https://www.reuters.com/article/us-china-malaysia/malaysia-to-cancel-20-billion-china-backed-rail-project-minister-idUSKCN1PK03P