Malaysia suspends multi-billion dollar China-backed deals



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KUALA LUMPUR: Najib Razak, China, said today, it has been broken down by China's back-to-back projects worth billions of dollars, the latest big-ticket.

Najib, who was unseated by his mentor Mahathir Mohamad in elections last May.

Finance Minister Lim Guan Eng said he had ordered the suspension of two pipelines and a 688-kilometer (430-mile) rail link worth a combined 90.4 billion ringgit (USD 22.35 billion).

The China Petroleum Pipeline Bureau, while the China Communications Construction Company served as the main contractor for the East Coast Rail Link.

Lim said Mahathir had ordered the suspensions in a bid to target Malaysia's estimated $ 250 billion national debt and other liabilities.

"The decisions are said to be directed at the provisions mentioned in the agreements," Lim said, in an apparent attempt to allay that Beijing was being singled out. Malaysia's previous government under Najib had warm ties with China and signed a string of deals for Beijing-funded projects.

But critics say many agreements lacked transparency, fuelling suspicions they were struck in exchange for help in paying off debts of Najib's regime.

Mahathir, 92, has pledged to review Chinese deals seen as dubious, calling into question Malaysia's status as one of Beijing's most cooperative partners in its regional infrastructure push.

In May he postponed plans to build a high-speed rail link between Singapore and Malaysia, saying it was too costly.

Song Seng Wun, a regional economist with CIMB Private Banking, said the latest suspensions could prompt some investors to hold back. "Anyone with any business related to the administration will be lying low," he told AFP.

"They would not be starting any new projects because they could not be sure that their existing project or contracts might be under review."

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