14.6 C
October 21, 2019
Asia Business Latest Muslim World World

Malaysia scraps multi-billion China-funded rail project

KUALA LUMPUR: Malaysia has scrapped a multi-billion dollar China-funded rail project for being too high in cost.

In a bid to cut the country’s $250 billion debt, the Mahathir-led government has in recent months suspended several major projects signed under the country´s previous scandal-plagued regime.

Economics minister Azmin Ali said Malaysia made the decision two days ago on the 81 billion ringgit ($19.6 billion) east coast rail link (ECRL).

The project was designed to connect the eastern and western coasts of the peninsula.

The minister said that the decision to scrap the project was taken due its heavy cost.

He said that if the project was not terminated, Malaysia would have to pay an annual 500 million ringgit interest payment.

Malaysia´s previous government under Prime Minister Najib Razak had warm ties with China and signed up to a string of Beijing-funded projects.

The critics of the previous regime accuse the project lacked transparency.

Mahathir after coming into power ordered a review of mega-projects signed by Najib during his nine-year rule.

Azmin did not say how much compensation Malaysia would have to pay for cancelling the project, adding it would be determined by the finance ministry.