MALAYSIA’S decision to scrap the East Coast Rail Link (ECRL) might force China to rethink its ambitious Belt and Road Initiative to build railways, ports and other infrastructure across the globe, reports Bloomberg today.

Prime Minister Dr Mahathir Mohamad said yesterday Putrajaya wants to cut back on expenses it cannot afford, referring to the RM100 billion ECRL despite conflicting statements from ministers Azmin Ali and Lim Guan Eng.

“We are burdened by very heavy debts and have to cut back on some expenditures incurred by the previous government.

“It is not that we don’t want to honour our contracts, but we just cannot pay. This contract may cost us more than RM100 billion and will impoverish us,” he said, although the government has yet to announce formally a final decision on scrapping the Najib Razak-era deal.

The deal’s collapse adds urgency to a debate about Chinese President Xi Jinping’s US$1 trillion (RM4.2 trillion) programme after various Asian governments decided to suspend, scale back or terminate projects amid concerns over corruption, influence-peddling and rising debt, Bloomberg said.

Nepal cancelled and then reinstated a US$2.5 billion dam project while Pakistan cancelled a US$14 billion dam project because of its onerous financing terms.

Myanmar also decided to scale down plans for a US$7.5 billion deep-sea port.

“We are seeing more backlash and challenges,” Pang Zhongying, an international relations professor at Macau University of Science and Technology, told the business portal.

He said Beijing might need to absorb the lessons from all these incidents in a rapidly changing external landscape amid its own economic challenges.

The ECRL project has also turned into a headache for Beijing after the Wall Street Journal reported that contracts were inflated to bail out Najib’s brainchild 1MDB in 2016.

The Barisan Nasional government signed the RM95 billion ECRL project, undertaken by the China Communications Construction Co Ltd (CCCC Ltd), in return for funds to bail out the debt-racked 1Malaysia Development Bhd and fund other needs. – January 30, 2019.