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Mahathir says Chinese contractor will help run new rail link

AP  |  Kuala Lumpur 

said Monday a Chinese company building a rail link across peninsula will jointly help to manage, operate and maintain the network that will help reduce the country's financial burden.

The East Coast Rail Link was suspended after Mahathir's alliance swept into power last May, a decision that strained Malaysia's relations with China, its largest trading partner.

The project was revived last week after the contractor, state-owned Communications Construction Company Ltd., agreed to cut the cost by one-third to 44 billion ringgit (USD 10.7 billion).

The rail link connecting to eastern rural states is a key part of China's Belt and Road infrastructure initiative.

Mahathir said Monday the government chose to renegotiate the deal rather than pay compensation of 21.78 billion ringgit (USD 5.3 billion).

Under the new deal, Mahathir said CCCC will form a joint venture with Rail Link to operate and maintain the network.

The project is now slated for completion by the end of 2026.

Malaysia's was quoted as saying previously that the lower costs would mean the government would be paying less in interest on the loans.

The project is largely financed by and the main contract was awarded in 2016 to CCCC by former

The government has said it is investigating whether any money in the rail project had been channeled by to repay debts at the 1MDB state investment fund.

A massive financial scandal at 1MDB led to the election loss of Najib's coalition last and Najib is currently on trial for multiple corruption charges linked to 1MDB.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Mon, April 15 2019. 11:10 IST
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