Tun Dr Mahathir Mohamad in media might sound wishy-washy on his statement on cancelling infrastructure projects financed by China, but insiders have spilled the tea that current Malaysia’s prime minister made it crystal clear in private, as reported by South China Morning Post, that it is an absolutely firm decision to permanently cancelled the US$20 billion East Coast Rail Link and two natural gas pipelines worth US$2.3 billion.
The vagueness about some of the deals is to spare the Chinese from “losing face” over the cancellation of projects, suggested the insiders.
Government sources told This Week in Asia, also cited by SCMP that for now, Mahathir was unlikely to cancel outright the two projects to “make sure the Chinese do not lose face”.
“As we all know, face is very important for the Chinese … but there is agreement on both sides that the projects have to be cancelled because of Malaysia’s financial position,” said a source who dealt directly with Chinese negotiators.
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Thus, there’s emphasis to blame former PM Najib on this.
“This is why we keep saying it’s on Najib, it’s on Najib, it’s on Najib and not China … we don’t want to embarrass you, but you must protect our interests as well,” an unnamed official in the new administration said.
The source further said, “As far as the Chinese are concerned … if there is an outright cancellation, the whole world will know. Nobody will want to do business with them. Already there are problems in Sri Lanka, Pakistan in Africa and so on.”
Meanwhile, the multibillion-dollar project high-speed rail project between Kuala Lumpur and Singapore that has attracted interest from Chinese enterprises will be deferred for two years rather than cancelled, as Mahathir had claimed, the sources say.
Economic Affairs Minister Azmin Ali will be in Singapore on September 5 and 6 for final talks before signing an agreement on deferring the rail project. Malaysia faces a hefty reimbursement fee if it terminates the deal with its closest neighbour.
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The sources also said that projects such as the US$100 billion Forest City and the US$10.5 billion Melaka Gateway are likely to be allowed to continue because they involve private funds and are not “government-to-government” projects like the railways and gas pipeline.
Source: SCMP