Malaysia scraps US$3bil China-backed pipe­line plans

The Myanmar Times - - International Business -

MALAYSIA has fi­nally scrapped three China-backed pipe­line projects af­ter halt­ing work on them fol­low­ing the shock elec­tions in May that saw an op­po­si­tion al­liance as­sum­ing power for the first time in the coun­try.

A fi­nance min­istry spokes­woman con­firmed that the coun­try has can­celed three China-backed pipe­line projects.

The Fi­nan­cial Times ear­lier cited Malaysian Fi­nance Min­is­ter Lim Guan Eng say­ing he had sent a let­ter to”rel­e­vant par­ties in Bei­jing to ter­mi­nate the planned projects. The plans com­prise of two oil and gas pipelines that cost more than $1 bil­lion each as well as a $795 mil­lion pipe­line that would link the state of Malacca to a re­fin­ery and petro­chem­i­cal plant in the state of Jo­hor, the pa­per re­ported.

Lim didn’t dis­close the can­cel­la­tion fees Malaysia would in­cur for can­cel­ing the pipe­line projects but said that the lawyers were han­dling the mat­ter, the re­port said.

Since tak­ing of­fice, Malaysian Prime Min­is­ter Ma­hathir Mo­hamad has been re­view­ing in­fra­struc­ture projects un­der­taken by the for­mer ad­min­is­tra­tion. The cost-cut­ting ef­forts are aimed at tack­ling the coun­try’s li­a­bil­i­ties which have surged above 1 tril­lion ring­git due to state guar­an­tees on bor­row­ing by state in­vest­ment firm 1MDB, which is at the cen­ter of a multi­bil­lion-dol­lar scan­dal.

Lim also told the Fi­nan­cial Times that an­other China-backed project -the East Coast Rail Link -- was un­der re­view. That project is be­ing built by China Com­mu­ni­ca­tions Con­struc­tion Co. In a visit to Bei­jing last month, Ma­hathir warned against new “colo­nial­ism” and called for free trade that was also “fair”.

Last week, Malaysia and Sin­ga­pore agreed to post­pone a multi­bil­lion-dol­lar high-speed rail project be­tween the two coun­tries un­til the end of May 2020.

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