PRIME Minister Dr Mahathir Mohamad’s move to try to smooth over touchy relations with China is being challenged by “rogue elements” in the civil service aligned to the previous administration, Singapore’s Straits Times reports.

Daim Zainuddin, who is chairman of the Council of Eminent Persons, is in China as a special envoy of Dr Mahathir to pave the way for the latter’s official visit next month.  The prime minister has said Daim’s trip is to kick off negotiations for several stalled mega projects in Malaysia involving Chinese investment.

Daim’s visit is also seen as an effort by the new Pakatan Harapan administration to get relations with China back on track.

However, Daim’s close associates were quoted in the report as saying that last week’s Malaysian Anti-Corruption Commission (MACC) raids on two Chinese companies coinciding with his trip was an indication of rebellion within the top level of Malaysia’s civil service.

“Diplomatic sources familiar with the situation said Daim was stumped when he was informed by his counterparts in China about the raids on the two Chinese concerns by MACC just moments before his meeting with Foreign Minister Wang Yi,” said the report.

The anti-graft agency’s July 18 operation on Trans-Sabah gas pipeline (TSGP) and East Coast Rail Line (ECRL), two state-owned Chinese entities linked to the multi-product pipeline (MPP), had thrown a spanner in the works.

Senior Malaysian construction sector executives involved in the projects speculated that their Chinese counterparts considered the raids to be indicative of the Mahathir administration’s uncompromising stance.

While a Malaysian government official insisted that the raids were “unrelated”, the Straits Times claims there is “strong speculation” that senior civil servants still aligned to former prime minister Najib Razak were attempting to sabotage Daim’s mission.

“There is strong speculation that the country’s restive political environment may be behind the attempts to undermine Mr Daim’s push to get ties with China back on track ahead of Tun Dr Mahathir’s official visit to Beijing next month,” it said.

“One theory floated by close Daim associates is that rogue elements in the civil service aligned to the previous administration may have instigated the MACC to carry out the raids in a bid to complicate already touchy diplomatic ties with China.”

The main contractor of the ECRL, a project initiated by the Najib administration, is China Communications Construction Company (CCCC). It signed an MoU with Malaysia Railway Link Sdn Bid (MRL).

The MPP and TSGP projects, with a total construction cost of RM9.4 billion, were awarded to China Petroleum Pipeline Bureau (CPPB) on November 1, 2016.

On July 3, the finance ministry issued a suspension notice for all contracts related to the MPP, TSGP, and ECRL projects. Lim had said the suspensions were “solely directed towards the related contractors relating to the provisions mentioned in the agreements, and not at any particular country”.

The MPP is a 600km petroleum pipeline from Malacca and Port Dickson to Jitra, Kedah, while  TGSP is a 662km gas pipeline from Kimanis Gas Terminal to Sandakan and Tawau.

The original scope of the RM46 billion ECRL from Gombak in Selangor to Wakaf Baru in Kelantan, was further expanded by the previous government with costs reaching RM80.92 billion, including interest, land acquisition fees and other operational costs. – July 22, 2018.