Prime Minister Mahathir Mohamad said operate a Chinese company building a railway link across peninsula Malaysia will collectively help to handle and take care of the network that will reduce the country’s financial burden.
After Mahathir’s alliance swept into power a decision that amuses Malaysia’s connections with China, its biggest trading 31, Even the East Coast Rail Link was suspended.
The rail link connecting Malaysia’s west coast to rural states is an integral part of Road infrastructure initiative along with China’s Belt.
The railroad project will cost 68.7 million ringgit ($16.7 million) per kilometer, down from 95.5 million ringgit ($23.2 million) earlier, he said.
Under the new agreement, Mahathir stated CCCC will form a venture firm with Malaysia Rail Link to present technical support and share the risk that was operational. He explained the participation of CCCC as rail operator will help attract Chinese investment.
CCCC has also agreed to refund part of a $ 3.1 billion ringgit ($753.4 million) progress payment, with just 1 billion ringgit ($243 million) to be paid over the following two months,” he explained.
Although the rail project will probably be shortened by 40 km (24.8 miles) to 648 km (402.6 miles), he stated the double-track lineup will have 20 channels and cut through five nations, rather than four previously. He explained the new alignment will also mean preventing having to tunnel through a mountain range in central Selangor state, which is the longest quartz dyke on earth.
The project, which is slated for completion by the end of 2026 rather than 2024, is financed by China.
Mahathir said the government is still negotiating the loan amount however it will be lowered substantially and this will lead to paying less interest on the loan.
He said the government is also”taking advantage of the agreement to work out the purchase price of hand oil by China,” but didn’t give additional details.
Officials said work on the rail link could restart by next month.
Mahathir’s government has axed or reviewed large-scale infrastructure projects to successfully rein in surging federal debt that it blames on corruption in the government.
Aside from the rail link, the authorities last year also cancelled two China-backed pipelines costing at 9.3 billion ringgit ($2.3 billion) after finding 90 percent of their job’s costs had been paid but only 13 percent of labour was finished.
The government has said it’s exploring whether any cash from the railroad project was steered by Najib’s government to settle debts at the 1MDB state investment finance. A financial scandal in 1MDB resulted in the election loss of the coalition of Najib and Najib is presently on trial for corruption charges linked to 1MDB.