Thu, Feb 21, 2019 - Page 10 News List

Malaysia nears deal over China rail


Malaysia is making progress in talks with China to revive a rail project that Malaysian Prime Minister Mahathir Mohamad’s government said it would cancel, Malaysian Minister of Foreign Affairs Saifuddin Abdullah said.

China is willing to reduce the US$20 billion price tag for the East Coast Rail Link project and talks are “in the last mile,” Saifuddin said in an interview on Tuesday.

Discussions have been led by Daim Zainuddin, an adviser to Mahathir, with the aim of reaching a smaller project size and cost, he said.

“It is not canceled until and unless we can’t settle on the numbers,” Saifuddin said. “China understands our constraint and they’re willing to scale down the size of the project and the cost. The discussion is probably in the last mile.”

In a wide-ranging interview at his office near Kuala Lumpur, Saifuddin discussed foreign investments, plans to reopen the country’s embassy in Pyongyang and efforts to speak up for China’s Muslim minorities in a “tactful” way.

Since returning to power in May last year, Mahathir has tested Malaysia’s relations with the world’s second-largest economy.

Besides the railway, he has also canceled a gas pipeline project backed by China and warned against “a new version of colonialism” on a trip to Beijing.

China’s state-run newspaper the Global Times last year blasted Mahathir’s “piercing” remarks, saying that they “will definitely make Chinese investors worry about Malaysian public opinion and whether such an atmosphere will affect investment in the country.”

There have been signs that Malaysia wants to ease tensions with China.

Mahathir last month struck a conciliatory tone and said that the Malaysian government canceled the rail project only due to cost, leading to renewed talks.

Members of his Cabinet have declined to confirm or deny a Wall Street Journal report that said senior Chinese leaders offered Mahathir’s predecessor help bailing out troubled state fund 1Malaysia Development Bhd in exchange for stakes in projects.

Saifuddin said he has not seen the meeting minutes cited by the Journal.

The nine-month old Malaysian government is seeking to balance efforts to attract investment with an anti-corruption drive that has led it to cancel and renegotiate billion-dollar contracts.

The scales are set to begin tipping toward the former, Saifuddin said.

“We’re working around the clock to try to quickly get things moving in the right direction when it comes to those contracts that have been awarded, while also attracting new investments,” he said. “We have made clear that we plan to be business-friendly.”

The Southeast Asian country is looking to play a small role in the ongoing talks between North Korea and the US by linking the reopening of its Pyongyang embassy to the outcome of an upcoming summit between US President Donald Trump and North Korean leader Kim Jong-un in Hanoi.

Malaysia’s link to North Korea deteriorated after Kim’s half-brother, Kim Jong-nam, was assassinated at an airport near Kuala Lumpur in 2017.

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