Malaysia Still in Talks With China Over $20 Billion Rail: Star

(Bloomberg) -- Talks for a $20 billion Malaysian rail project are still ongoing, with the Southeast Asian nation expecting to make a decision "as soon as possible," the Star newspaper reported, citing Prime Minister Mahathir Mohamad.

Mahathir said the status of the East Coast Railway Link is being negotiated with China, and that he couldn’t disclose further information until the outcome of the discussions, the newspaper said. He would also reject China’s offer to halve the cost of the project, the Star reported, citing a hypothetical answer from the premier.

Malaysia Still in Talks With China Over $20 Billion Rail: Star

The report caps a week of seemingly mixed messages on the fate of the rail project. Malaysia’s Economic Affairs Minister Mohamed Azmin Ali said a week ago the country will terminate the project as it was beyond the government’s financial capability. That was followed by Finance Minister Lim Guan Eng’s comment that an announcement would be issued on the instructions of Mahathir.

The premier said on Tuesday that the government’s reason for canceling the rail was a lack of funds.

China Communications Construction Co., the contractor, took earlier steps to rationalize its workforce following the Malaysian finance ministry’s instruction last year to suspend all contracts related to Malaysia Rail Link Sdn. It also had offered to cut construction costs for the 688-kilometer (428-mile) project by as much as half, Reuters reported, citing unidentified people familiar with the matter.

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