Malaysian leader says China-backed rail project too costly

Malaysian Prime Minister Mahathir Mohamad says that a multi-billion-dollar rail link project backed by China would "impoverish" the country, saddling the government with excess debt for the next 30 years.

Since winning a historic vote last May, Mahathir's government has axed or reviewed large-scale infrastructure projects to rein in surging national debt that it blames mostly on corruption in the previous government.

But there is confusion over the status of the USD 20 billion East Coast Rail Link. Mahathir's comments Tuesday suggested it might be cancelled.

Mahathir said the government "just cannot pay" as the project cost could exceed 100 billion ringgit (USD 24.3 billion). He said paying compensation would cost less.

A Chinese government spokesman in Beijing said the project was agreed to "on the basis of mutual respect and equality.