Malaysia's Mahathir says will raise 'unfair' contracts in visit to China

Malaysia's Mahathir says will raise 'unfair' contracts in visit to China

Lim said a report on the pipeline scandal would be filed with the Malaysian Anti-Corruption Commission, adding that he would "seek the assistance of the China government to help trace the flow of funds in China, in order to investigate the possibility of money laundering".

EximBank and CPPB did not immediately respond to Reuters request for comment.

It is created to be part of China's Belt and Road initiative to form a huge economic zone that spans Asia and Europe.

The East Coast Rail Link (ECRL) project owner Malaysia Rail Link Sdn Bhd (MRL) has instructed its main contractor China Communications Construction Ltd (CCCC) to suspend all works under the engineering, procurement, construction and commissioning contract (EPCC) of the controversial ERCL project with immediate effect.

The loan was given to Suria Strategic Energy Resources (SSER), a subsidiary of the Malaysian finance ministry which oversees the two pipelines.

He rhetorically asked Najib, whom he said "has been active on Facebook recently", to explain how he could have approved such a contract, which he called "lopsided".

The 9.4 billion ringgit ($2.3 billion) pipeline projects are located, respectively along the west coast of peninsular Malaysia and in Malaysian Borneo.

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Since taking office, Mahathir has pledged to review major projects agreed by the scandal-plagued Najib administration, saying they did not benefit the country economically.

Yesterday, in a separate statement to the Hong Kong stock exchange, CCCC said it "will take initiative to protect its legitimate rights and interests as a general contractor for design and construction pursuant to the contractual terms of the ECRL Project".

The company was contracted to build a 530 km (329 miles) railway traversing the Malaysian peninsula from east to west.

Finance Minister Lim Guan Eng earlier this week said there must be a "drastic" cut in costs for the 688-kilometer (430-mile) East Coast Rail Link, whose cost at 81 billion ringgit ($20 billion) is almost 50 percent higher than earlier estimated.

"The decisions are exclusively directed towards the related contractors relating to the provisions mentioned in the agreements, and not at any particular country", Lim said, in an apparent attempt to allay concerns that China was being singled out.

The finance ministry official said ECRL and the two pipeline projects were suspended pending high-level talks with China to renegotiate the terms of the projects.

"I want to go to China as early as possible, but the president of China is not available in July so I will go in August", Mahathir said at a news conference in the administrative capital Putrajaya outside Kuala Lumpur. "Under the situation we have no choice but to adhere to the suspension instruction", it said.

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