Tun Dr Mahathir Mohamad says the East Coast Rail Link and other projects awarded to Chinese firms are cancelled as China's President Xi Jinping has agreed with Malaysia's stand. — Reuters pic

BEIJING, Aug 21 — The East Coast Rail Link (ECRL) and other projects the previous government awarded to Chinese firms are cancelled as China's President Xi Jinping has agreed with Malaysia's stand, Tun Dr Mahathir Mohamad said today.

The negotiation of compensation and other issues will be handled by government officials and the Chinese companies involved, the prime minister told reporters at the end of his five-day official visit to China.

“I explained to them the projects will not go on because we do not need these and our priority is to reduce debt.

“They (China's leaders) see our point our view,” Dr Mahathir said.

The prime minister then disclosed his main purpose for visiting China was to solve the problem of “Najib’s debt”, in reference to immediate predecessor Datuk Seri Najib Razak.

Dr Mahathir said his administration was now saddled with “billions of ringgit” in needless debt that he blamed on the Najib administration.

Both the ECRL and two pipeline projects that China agreed to call off were initiated during Najib’s time.

“These are Najib’s debts from projects which have no benefit to us,” he said.

Dr Mahathir held talks with China’s President Xi Jinping and Premier Li Keqiang yesterday.

The prime minister said the two were informed about the severity of Malaysia’s predicament and debts then.

“I explained to them we cannot have the ECRL at this moment. We have to solve our financial difficulties. They agreed.”

Prior to Dr Mahathir’s visit, Finance Minister Lim Guan Eng disclosed of suspicious payment structures in the ECRL and the two gas pipeline projects that he also claimed was linked to the 1MDB corruption scandal.

The pipeline projects, in particular, featured time-based payments that allowed the Chinese firms to draw down RM8.3 billion out of the project’s combined value of RM9.4 billion without performing any tangible development.

Lim also disclosed in Parliament last week that the ECRL would have cost up to RM1 billion annually to maintain.

Dr Mahathir also alleged during his trip that the Najib administration asked the China firms awarded the projects to issue 30 per cent stakes in the local ventures to selected individuals, which Najib denied.