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Published: Sun, July 08, 2018
Global Media | By Abel Hampton

Malaysia investigates China-backed project links with 1MDB

Malaysia investigates China-backed project links with 1MDB

Mahathir, 92, has pledged to review Chinese deals seen as dubious, calling into question Malaysia's status as one of Beijing's most cooperative partners in its regional infrastructure push.

Yesterday, Finance Minister Lim Guan Eng had announced that the ECRL cost is actually RM81 billion and in order for the project to proceed, costs must be reduced first.

Earlier, concerns had arisen over the new Pakatan Harapan's government's ability to take charge of the project had drawn comparisons to CCCC's involvement in Sri Lanka's Hambantota port.

Prime Minister Tun Dr Mahathir Mohamad expressed disappointment that Saudi Arabia did not comment on Datuk Seri Najib Razak's claim that the RM2.6 billion deposited in his account was a "donation" from one of the kingdom's royalty.

Lim said a report on the pipeline scandal would be filed with the Malaysian Anti-Corruption Commission, adding that he would "seek the assistance of the China government to help trace the flow of funds in China, in order to investigate the possibility of money laundering".

The bulk of the work on the 620-kilometer (385-mile) rail line was awarded to state-owned China Communication Construction Company past year, and 85 percent of the financing was provided by the Export Import Bank of China.

The entire 688-km (428-mile) ECRL will connect the South China Sea off the east coast of peninsular Malaysia with the strategic shipping routes of the Straits of Malacca to the west. The indefinite suspension could cause additional costs, losses and damages, the company said.

However, CCCC has reiterated that it had signed a legal contract with the previous Barisan Nasional government before construction started.

"We respect and comply with Malaysian laws".

"We are upset and concerned about the livelihood of our 2,250 local staff, as well as several hundred subcontractors, suppliers and consultancy firms", the statement read.

"The terms are very damaging to our economy", he said at the time.

In a statement, Lim also said the ECRL project is also not expected to cover its operating costs.

CCCC said it hoped both sides can find a win-win solution through negotiations and that the suspension will be lifted soon.

In addition to the ECRL, the finance ministry yesterday confirmed that two pipeline projects awarded in 2016 to China Petroleum Pipeline Bureau, together worth $2.3bn (9.4 billion ringgits), had also been suspended, The Edge Markets reports.

Mahathir's government has also axed a high-speed rail line to Singapore, deeming it too costly.

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