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China has denied offering inducements to the Malaysian government to sign a new $US11 billion deal for the go-ahead of the East Coast Rail Link, a key project in President Xi Jinping’s Belt and Road Initiative.
Malaysia announced on Friday that it had reached a new agreement for the resumption of work on the China-backed project that was cancelled in August by Prime Minister Mahathir Mohamad, who criticised it for being too expensive.
Dr Mahathir’s office said the first two phases of the rail link would now cost about 44 billion ringgit ($14.9bn) compared with the original 65.5 billion ringgit.
“This reduction will surely benefit Malaysia and lighten the burden on the country’s financial position,” the Prime Minister’s office said.
It said a new agreement was reached on the project between Malaysia Rail Link and the China Communications Construction Company over the project.
Dr Mahathir has been highly critical of the cost of the rail link, which was negotiated by his predecessor, Najib Razak, in 2016.
China’s Foreign Ministry spokesman Lu Kang said the governments and businesses of China and Malaysia had reached an agreement “in the spirit of mutual respect and equal consultation, which is conducive to both sides”.
He rejected suggestions China had offered Malaysian anything for the new agreement.
“Regarding whether China has offered Malaysia anything in exchange for the agreement, there is no such offering at all,” he said.
Mr Lu conceded there had been differences of opinion between China and Malaysia over the project. “Some say there have been differences between China and Malaysia recently,” he said.
“Now facts have proven our two sides can resolve differences through friendly consultations.”
The revised agreement will be closely watched for its implications for BRI projects that are part of Mr Xi’s ambitious infrastructure and trade link vision to boost China’s ties with Asia, Eurasia, Europe and Africa.
Mr Lu said there was “no fixed pattern” when it came to China’s negotiations on BRI projects with different countries.
This article first appeared on www.theaustralian.com.au
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