The Malaysian government has scrapped plans for a massive Beijing-backed rail link on the country’s east coast, according to The Star, claiming that the project’s financing was unsustainable.
This is the latest withdrawal by the government led by Mahathir Mohamad from Chinese deals signed under the previous Malaysian administration, some of which are suspected of being agreed in return for corrupt payments linked to the now notorious 1MDB sovereign wealth fund.
Malaysia’s economics minister Azmin Ali said that the decision was made last week to cancel the east coast rail link (ECRL), worth 81 billion ringgit ($19.6 billion).
“The cost of the ECRL development is too big, so we have no financial ability at this time,” said Ali.
If the project went ahead, Ali warned, it would cost Malaysia 500 million ringgit a year in interest payments. The country is already trying to manage a one trillion ringgit national debt burden.