China firm told to halt Malaysia rail link project

The projects to build two pipelines were signed in 2016 by the administration of former Malaysian prime minister Datuk Seri Najib Razak

Malaysia has already paid CCCC $5bn toward the ECRL, although in comments this week finance minister Lim said half that could be recovered in a "worst case scenario" if the project is withdrawn.

The 688-km (428-mile) ECRL will connect the South China Sea off the east coast of peninsular Malaysia with the strategic shipping routes of the Straits of Malacca to the west.

"The decisions are exclusively directed towards the related contractors relating to provisions mentioned in the agreements, and not at any particular country", Eng said in a news release.

KUALA LUMPUR, July 6 ― Prime Minister Tun Dr Mahathir Mohamad reiterated today that there will not be any political interference in the prosecution of his predecessor Datuk Seri Najib Razak.

He said the Pakatan Harapan (PH) coalition had promised to strictly abide by the separation of powers among the three branches of government in the run-up to the 14th general election and would honour its word.

SSER has instructed contractor China Petroleum Pipeline Bureau (CPPB) to suspend work on the pipelines on July 4, said the finance ministry source, who declined to be identified.

The charges relate to funds that were allegedly transferred from SRC International, a former subsidiary of 1Malaysia Development Berhad (1MBD) into Najib's personal account.

"The terms are very damaging to our economy", he said at the time.

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Mahathir's announcement came at the same time the government canceled plans to build a bullet train between Kuala Lumpur and Singapore.

"One of our promises was that we would honour the separation of powers between the legislative, executive and judiciary, so I can not interfere with that the Attorney-General wants to do".

The new Malaysian government has also halted $2.3bn worth of pipeline projects awarded to a Chinese firm under Najib's watch, saying it has been paying for work not done, and asking the Chinese government for help in investigating money laundering (more below). "While the duration of the suspension has not been specified, we are concerned about incurring additional cost, losses and damages arising from the suspension".

"So, we can't accuse Saudi Arabia, unless, of course, there is proof that Saudi Arabia has tried to interfere in Malaysian politics", Mahathir said.

CCCC said it hoped both sides can find a win-win solution through negotiations and that the suspension will be lifted soon.

Yesterday, Finance Minister Lim Guan Eng had announced that the ECRL cost is actually RM81 billion and in order for the project to proceed, costs must be reduced first.

Completing Malaysia's biggest rail project as previously planned would cost $20 billion, Lim said on Tuesday, almost 50 percent higher than estimates under the previous government.

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