KUCHING: Prime Minister Tun Dr Mahathir Mohamad has highlighted unusual details surrounding the East Coast Railway Line (ECRL) project.
Money from a RM55 billion loan given out by a Chinese bank – the Export and Import Bank of China (Exim) – for Malaysia to build the ECRL is directly paid to the construction company China Communications Construction Co Ltd (CCCC).
Dr Mahathir in an interview with The Edge said this is not the normal way it is done, as the loan would normally have to be drawn down in Malaysia and paid to the foreign company’s local subsidiary.
“The contractor is from China and the lending is from China.
“And the money is not supposed to come here but (kept abroad) to pay the contractor in China,” he said in the interview.
Dr Mahathir also said that the payments to CCCC were not on the basis of work done, but follows a pre-determined timetable which the Prime Minister said was “also not normal”.
He highlighted suspicions that some money paid for the ECRL was to be used to pay 1Malaysia Development Bhd’s (1MDB) debts and to buy certain companies as The Edge article cited sources revealing that the ECRL contract was inflated by some RM20 billion from when it was signed back in 2016.
It alleged that the extra RM20 billion was used to help 1MDB meet some of its debt obligations and for the purchase of companies linked to Jho Lo.
Dr Mahathir said his government intends to review and renegotiate the terms of the project with the various Chinese parties.