Bangkok: The government of Malaysia on Saturday announced its decision to cancel a $20-billion railway link project that was being built and financed by China. Malaysia’s official news agency Bernama reported that the decision to scrap the East Coast Rail Link (ECRL)construction plan was taken after attempts by the government to bring down the high project cost failed.
The railway link was being built by China Communications Construction Company as part of Beijing’s Belt and Road Initiative and some 85 per cent of the project cost was to be financed by the Export-Import Bank of China.
Minister of Economic Affairs Azmin Ali said a review of the costs involved showed that the project exceeded the government’s financial capabilities, Efe news reported. “If the project is not terminated, the government will have to bear the interest rate of about RM500 million a year,” said Ali. The Ministry of Finance will now decide on an appropriate compensation for the cancellation to the Chinese company that will not burden the country economically, according to Bernama. (IANS)
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