Kuala Lumpur: Prime Minister Dr Mahathir told Malaysian reporters here at the end of his five-day official visit to China today that contracts negotiated with Chinese companies for the East Coast Rail Link (ECRL) and pipeline projects had “no exit clauses”, so Malaysia has to pay out “huge sums” in compensation if Malaysia cancels the projects.
“If we have to pay, we have to pay,” he said when asked about whether Malaysia would have to compensate Chinese contractors.
He blames the former Prime Minister Najib Razak and the previous government Barisan Nasional, saying that it was so stupid of them to have signed the projects with China without putting any clause for exit or taking into consideration that the projects may be cancelled if issues raised.
“It’s the stupidity of negotiations. There must be exit clauses. Now we have to pay huge sums of money.
“We must now find a way to exit these projects at the lowest cost possible. It is all because of our own stupidity.”
Dr Mahathir did not elaborate on how Malaysia is going to pay the huge sums in compensation to China but he hinted that he may summon up Najib Razak for unwisely singing that contracts
Maybe “we can recover from Najib.
“He was the one after all who signed. What kind of stupidity is this?” he said.
The Prime Minister Dr mathathir had decided to cancel the two mega projects (namely the East Coast Rail Link (ECRL) and Trans Sabah Gas Pipeline (TSGP)) which were dealt by companies from the People’s Republic of China due to financial deficits.
He said, Malaysia does not need those projects at this moment as the country’s priority is how to solve the financial deficits.
“I have explained to the two Chinese leaders, President Xi Jinping and Premier Li Keqiang that we do not need those projects at this moment… maybe later.
“We cannot have ECRL and high speed train as it is all about borrowing too much money and we cannot afford to pay. They see our point of view and they accepted them.
“The Chinese government did not talk about the companies involved,” he told Malaysian media before he leaves Beijing after his five days visit.
The Prime Minister added, Xi Jinping and Li Keqiang understood the reasons behind the cancellation of the two Chinese Government backed projects.- Malaysia World News