Rail News


October 06 , 2021

What Happened To China’s BRI Projects in Malaysia?

The Diplomat 
October 05, 2021 (Malaysia)

Of the slew of BRI megaproject deals signed over the first five years of the initiative, most have either been canceled or come to a standstill.

It has been nearly a decade since China’s first Belt and Road Initiative (BRI) project gained a foothold in Malaysia, and despite the slew of megaproject deals signed in the initial five years, many have either come to a standstill or were cancelled.

Among the few BRI projects left standing is the East Coast Rail Link (ECRL), which Prime Minister Ismail Sabri Yaakob, the country’s third premier since Najib Razak was voted out of office in May 2018, vowed to resume and complete under the 12th Malaysia Plan.

The 50 billion Malaysian ringgit ($11.9 billion) rail project linking the east and west coast of the Malaysian peninsula was subjected to multiple renegotiations and realignments following its suspension in 2018 by then Prime Minister Mahathir Mohamad.

The ECRL was one of many BRI projects put on ice amid allegations that Najib’s administration intentionally agreed to lopsided deals with China at inflated prices to bail out debt-laden state fund 1Malaysia Development Berhad (1MDB). Both China and Najib have denied the bailout claim.

The suspicions, however, were later confirmed after Mahathir’s Pakatan Harapan government gained access to classified documents, known as the “red files,” which indicated that a number of China’s BRI projects, such as the ECRL and two pipeline projects, contained dubious terms.

Mahathir made it clear that the ECRL was inflated by up to 30 billion ringgit to pay down 1MDB’s debts, and that only 15 percent of the project’s construction had been completed while 20 billion ringgit or 33 percent of the railway link’s initial 60 billion ringgit price tag had been paid.


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