China's continues its largest push into Southeast Asia via its ongoing Belt and Road Initiative. To ensure the success of its initiative, which it sees as the 21st century's maritime Silk Road, the country has offered to cut down the cost of a railway project it is currently negotiating with Malaysia. The railway project, which is estimated to cost around US$20 billion, will be the centerpiece of the country's infrastructure push.
According to sources with access to the current talks between both nations, China has offered to cut the cost of the project in half. However, the country is currently dealing with a lot of political barriers given that it has to convince a lot of Malaysian officials with opposing views.
Ensuring that the railway gets built is vital to ensuring the completion of the Coast Railway Link (ECRL) in the country. The project's contractor, China Communications Construction (CCCC) offered to complete the entire project for around half of the original US$16.39 billion intended for the 688km railway. The rest of the US$20 billion will be spent on land acquisition and other miscellaneous expenses.
Despite the large cost discount, the Malaysian government is still reluctant to accept the terms. This is mainly due to the views of the country's current leader, who was against his predecessor's relationship with China. Prime Minister Mahathir Mohamad is an open critic of China's investments and was against his predecessor acceptance of the ECRL project.
Malaysia's Finance Minister is still considering more talks with China and has not yet given up on the project. Some Malaysian officials have indicated that they may be looking for cheaper proposals. Sources privy to the negotiations have stated that striking a deal has become very complicated because there are simply too many Malaysian politicians involved. Different politicians apparently have different views about the project, which only worsens the situation.
The CCCC along with its partner Malaysia Rail Line (MRL) have not yet given up and are continually offering proposals to government officials. The tandem has also already presented to the prime minister's adviser, Daim Zainuddin.
China's ministry spokesman Geng Shuang mentioned in an interview that the project was already agreed upon by both sides and that it was based on mutually beneficial terms. Geng was talking about the deal that was made when the rail project was launched in 2017 under the administration of Mahathir's predecessor, Najib Razak. He is apparently in contact with Malaysian officials but did not elaborate on their discussions.
