Report: Malaysia scraps three China-backed pipeline plans

Ranjit Singh
Finance Minister Lim Guan Eng is said to have sent a letter to ‘relevant parties’ in Beijing to terminate the planned projects. — Picture by Shafwan Zaidon

KUALA LUMPUR, Sept 10 — The Malaysian government has finally decided to abort three China-backed pipeline projects after halting work on them, Bloomberg reported today.

A Finance Ministry spokesman confirmed to Bloomberg that the government had cancelled three China-backed pipeline projects.

Bloomberg quoted The Financial Times as saying that Finance Minister Lim Guan Eng had sent a letter to “relevant parties” in Beijing to terminate the planned projects.

“The plans comprise two oil and gas pipelines that cost more than US$1 billion (RM4.14 billion) each as well as a US$795 million pipeline that would link the state of Melaka to a refinery and petrochemical plant in the state of Johor,” the paper reported.

The report stated that Lim did not disclose the cancellation fees that Malaysia would incur for scrapping the pipeline projects, but said that lawyers were handling the matter.

Lim also told the Financial Times that another China-backed project — the East Coast Rail Link (ECRL) — was under review. That project is being built by China Communications Construction Co.

Prime Minister Tun Dr Mahathir Mohamad has taken a slew of measures to rein in government debt that stands in excess of RM1 trillion after the Pakatan Harapan coalition that he leads was voted into power on May 9. The measures include a review of infrastructure projects undertaken by the former Barisan Nasional administration.

The cost-cutting efforts are aimed at tackling the country’s liabilities due to state guarantees on borrowing by state investment firm 1Malaysia Development Berhad (1MDB), which is at the centre of a multibillion-dollar scandal.

During a state visit to Beijing last month, Dr Mahathir cautioned against new “colonialism” and called for free trade that was also “fair”.

Last week, Malaysia and Singapore agreed to postpone the multibillion-dollar High-Speed Rail (HSR) project between the two countries until the end of May 2020.

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