Mahathir says Malaysia will be 'impoverished' if East Coast Rail Link proceeds

Malaysian Prime Minister Mahathir Mohamad said the official status of the East Coast Railway Link project will be announced by the Ministry of Finance soon.
PHOTO: The New Paper

PUTRAJAYA - Malaysia will be "impoverished" if the government proceeds with the multibillion-dollar East Coast Railway Link project, Prime Minister Mahathir Mohamad said on Tuesday (Jan 29).

While he did not confirm that the RM81 billion (S$27 billion) project had been scrapped, Tun Mahathir said paying compensation for cancelling the China-backed mega rail link was still cheaper than bearing the project's cost.

"We are burdened with heavy debts. We seek understanding from all parties. We will be impoverished by the project if we go on," he told reporters after launching the country's first National Anti-Corruption Plan.

"The huge compensation for cancelling it is not as huge as the amount we have to carry for the next 30 years," he said.

Dr Mahathir said the official status of the project will be announced by the Ministry of Finance soon.

The Straits Times reported last week that the government had cancelled the original contract with the state-owned China Communications Construction Company (CCCC). The government is said to be seeking to halve the estimated project cost to RM40 billion.

The 688km railway line is expected to link the east and west coasts of Peninsular Malaysia.

But work on the link has been suspended since last July after the new Pakatan Harapan government took office following its victory at the May 9 general election, promising to review the country's large-scale infrastructure projects.

There had been confusion surrounding the project's status after Economic Affairs Minister Azmin Ali on Saturday announced that the government had decided to cancel the project.

Hours later, Finance Minister Lim Guan Eng issued a denial, claiming that Datuk Seri Azmin was not privy to the decision made by Dr Mahathir.

He said the government would make an official announcement on the project this week.

When asked about the project on Tuesday, Mr Lim said he had been advised by Dr Mahathir not to make any announcement yet.

"I have met with the Prime Minister, and he has suggested that I do not make any statement for the time being. So, wait for the statement," he said.