Malaysia to Terminate $20 Billion China-Backed Rail Project

[TruthTheOnlyDefense]

Malaysia will terminate a $20 billion rail project with contractor China Communications Construction Co., Economic Affairs Minister Mohamed Azmin Ali said.

The Cabinet decided the East Coast Rail Link project was "beyond the government’s financial capability," he told reporters on Saturday. Malaysia Finance Minister Lim Guan Eng wouldn’t corroborate Azmin’s comments, saying an official announcement would be issued if necessary by next week on the instructions of Prime Minister Mahathir Mohamad.

“The decision was taken because the cost of the project was too high,” Azmin said in Kuala Lumpur. “If the project is not canceled, the government will have to bear the interest rate of about half a billion ringgit a year, which we can’t afford. Therefore, the project needs to be terminated without jeopardizing relations with China.”

Azmin said the amount of compensation for the cancellation will be determined by the Finance Ministry, which is conducting due diligence process, to ensure that the cost would not weigh on the country’s financial position.

While the government had received several proposals, it had yet to decide on whether it would appoint a new developer for the rail project as that would depend on the country’s financial capability, he said.

China Communications Construction took steps Thursday to rationalize its workforce following the Malaysian finance ministry’s instruction last year to suspend all contracts related to Malaysia Rail Link Sdn.

Malaysia Rail Link was appointed to oversee the East Coast Rail Link with China Communications Construction as the main contractor. The total cost for the project was expected to reach 81 billion ringgit ($19.6 billion).

— With assistance by Lilian Karunungan

https://www.bloomberg.com/news/arti...ate-20-billion-china-backed-rail-link-project

LOL at the Chinese.

 

[ARMalik]

Good decision by Malaysia. It is after-all a question of economics. It just did not add up economically for Malaysia to loan $20Billion dollars from China for a project that would have no real returns or benefits to its people. Well Done Mahatir. This is exactly what Pakistan should be doing. There is a strategic relationship I understand, but it does not mean loans for the sake of loans.

 

[lcloo]

A USD20 billion project for just 5 million populations in 3 states under opposition parties rules. Most of the population are low income group who can not afford the ticket fare of high speed train.

I would like to see the project to go ahead because my hometown is in one of the 3 states that the railway will pass through, and this has been my dream for years.

However, I do understand and accept the decision of the central government, because building the most expensive and advance high speed train in the poorest and sparsely populated region in the country is simply illogical. The expected annual losses in operation will be huge and un-sustainable.

They should instead build the high speed rail from the south bordering Singapore and run all the way to the North border with Thailand.

 

[lcloo]

The news is premature, Malaysian Prime minister said no decision yet.

News
Dr M now says no decision yet on ECRL
Yiswaree Palansamy,Malay Mail 1 hour 51 minutes ago

PETALING JAYA, Jan 29 — Prime Minister Tun Dr Mahathir Mohamad today confirmed that no final decision has been made with regards to the construction of the China-backed East Coast Rail Link (ECRL).

His announcement comes amidst heightened speculation that the mega project has been scrapped.

“No decision has been made. We feel that we should give time for both sides to come up with a solution to the problem.

“I am not in a position to give the explanation about what we are going to do, but no decision has been made at this moment,” he told reporters today.

He said there may be more negotiations, adding that “certain people” have already been given the task to solve the matter.

 

[OIO]

Malaysia will terminate a $20 billion rail project with contractor China Communications Construction Co., Economic Affairs Minister Mohamed Azmin Ali said.

The Cabinet decided the East Coast Rail Link project was "beyond the government’s financial capability," he told reporters on Saturday. Malaysia Finance Minister Lim Guan Eng wouldn’t corroborate Azmin’s comments, saying an official announcement would be issued if necessary by next week on the instructions of Prime Minister Mahathir Mohamad.

“The decision was taken because the cost of the project was too high,” Azmin said in Kuala Lumpur. “If the project is not canceled, the government will have to bear the interest rate of about half a billion ringgit a year, which we can’t afford. Therefore, the project needs to be terminated without jeopardizing relations with China.”

Azmin said the amount of compensation for the cancellation will be determined by the Finance Ministry, which is conducting due diligence process, to ensure that the cost would not weigh on the country’s financial position.

While the government had received several proposals, it had yet to decide on whether it would appoint a new developer for the rail project as that would depend on the country’s financial capability, he said.

China Communications Construction took steps Thursday to rationalize its workforce following the Malaysian finance ministry’s instruction last year to suspend all contracts related to Malaysia Rail Link Sdn.

Malaysia Rail Link was appointed to oversee the East Coast Rail Link with China Communications Construction as the main contractor. The total cost for the project was expected to reach 81 billion ringgit ($19.6 billion).

— With assistance by Lilian Karunungan

https://www.bloomberg.com/news/arti...ate-20-billion-china-backed-rail-link-project

LOL at the Chinese.

if you dont invest for future, you have no future.

 

[beijingwalker]

Some countries can never develop is because one government decides to do sth and all the expensive preparation jobs have been done, some projects are even half way through, then a new government is elected into the office and scraps the whole thing just out of spite, all the money being spent already just goes down the drain.

In China we never do things half way, we decide, we prepare and we get them done in the quickest time.

 

[Feng Leng]

Unprofitable infrastructure projects should not be pursued (barring other considerations like national security). If you don't need it, don't buy it. Duh!

 

[Mista]

They would rather pay a penalty to Singapore and delay the HSR, and the HSR made much better economic sense.

Unlikely that this project will survive.

 

[sixth]

1.
Thia HSR project was sabotage 10 years ago, the lost is due to the Thai people, otherwise HSR in Thailand is in operational now. The Thailand's development is setback to more than 10-20 years

2.
The same The Colombia HSR project was sabotage 5 years ago, the lost is due to the Colombians, otherwise HSR in Columbia is in operational now. The Columbia's development is setback to be more than 10-20 years

3.
It is happening to Malaysia now. That's the shortsighted decision makers' choice

4.
In 70's of the last century, In Taiwan Island the Government was planning to build an expressway connecting the island south and island north. The opposition force said people are poor, they don't have cars. An expressway is only for rich people, so don't build it.

The strong Government push the project go through, the expressway get build. After a few years, Economy getting develop, cars are affordable. High way traffics are heavy and busy. This is call development. don't observe it at stand still.

5.
When China was planning and building the Three Gorges Dam, the opposition forces inside and outside China, they collaborating and launching arguments against it. One of the reasons: look at the electricity price, how many cents for a KWH, then how much electricity can it generate per day, per year etc. so, After 100 years, the investment never get cover. so don't wast the money to build.

All those oppositions are either stupid, or maybe have an ill intention, it's laughable. if they succeed, setback is due to its country's development, delaying its people to get modernized, to move forward.

 

[beijingwalker]

Government planning needs consistency, otherwise development is just a pipe dream.

It's not decided yet and It seems that Malaysia has to pay a very heavy compensation if it cancels the contract.

Malaysia leader: Still negotiating China-backed rail project
THE ASSOCIATED PRESS
JANUARY 29, 2019 08:59 AM

https://www.newsobserver.com/news/business/article225221440.html