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China to shave US$2.4 billion off cost of Malaysia’s East Coast Rail Link. But will it be enough?
- Malaysia’s chief negotiator on the controversial Beijing-backed project, Daim Zainuddin, says a revised deal would send ‘a lot more Malaysia’s way’
- But experts say the final terms of the deal – previously criticised by PM Mahathir Mohamad as biased in China’s favour – remain obscure
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The Chinese government has offered to cut 10 billion ringgit (US$2.45 billion) off the price of Malaysia’s controversial East Coast Rail Link in an effort to get the project back on track before world leaders gather in Beijing for a summit on the “Belt and Road Initiative”. Whether that will be enough to gain a green light for the long-stalled project is anyone’s guess.
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Malaysia’s lead negotiator on the China-backed project, Daim Zainuddin, said last week that Beijing was hoping a revised deal could be finalised by April 2, weeks before Prime Minister Mahathir Mohamad heads to China for the April 25-27 meeting.
Daim said that in addition to the savings, revisions to the deal would ensure “a lot more comes [Malaysia’s] way”. Though Daim did not specify what he meant by this, the project has long faced accusations that its terms are biased in China’s favour. The rail link was among various China-linked projects that Mahathir either suspended or cancelled after his election in May last year. The 93-year-old leader had attacked the projects as inessential and costly and claimed his scandal-tainted predecessor Najib Razak had offered Chinese contractors a “sweetheart deal” as a quid pro quo for bailing out Malaysia’s state investment fund 1MDB.
Since then a question mark has hung over the rail link, with government ministers giving conflicting accounts over whether a deal was still a live option.
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Daim said there was now reason for optimism. “We may be able to resolve this as soon as possible,” he said. “I have a good relationship with [the Chinese] as I have known them since 1971. Maybe they are comfortable with me. I am an old man,” said Daim, who was finance minister from 1984 to 1991 during Mahathir’s first stint as prime minister and is now chairman of the government’s Council of Eminent Persons.
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