Yesterday, Dr Mahathir Mohamad told Malaysiakini that the cancellation of the ECRL and gas pipeline projects wasn’t a sure thing as the decision was ultimately that of companies involved.
However, for the past three months or so, he has been flipping back and forth between the projects being “on” to them being “off” by citing various reasons without once consulting the said companies.
A source familiar with the matter told The Third Force that Chinese president Xi Jinping is tired of Mahathir’s antics and has given him two months to consider the status of the projects.
All that concerns Xi at this very moment is if the Malaysian premier has the guts to abide by terms set by the Najib administration or compensate Chinese contractors in the event the projects are cancelled.
THE THIRD FORCE
On Wednesday, The Malaysian Insight reported China’s Ministry of Foreign affairs as saying that the cancellation of the ECRL and gas pipeline projects by Malaysia’s Dr Mahathir Mohamad would not hinder future bilateral relations between our two nations. A day earlier, the same media channel reported Mahathir as saying that both he and Chinese president Xi Jinping agreed to cancel the projects due to the fiscal position of the Government of Malaysia (GoM). The reports meant two things:
1. that Mahathir and Xi had discussed Malaysia’s fiscal woes, and
2, that Xi understood the GoM’s position and felt the projects needed to be scrapped.
When Xi met Mahathir on Monday, the duo did discuss Malaysia’s fiscal position and the possibility of renegotiating terms related to the ECRL project. Mahathir, however, wanted the gas pipeline projects to be scrapped altogether without the need for Malaysia to pay compensation. In return, he offered China an opportunity to embark in deep sea drilling with the Tan Sri Syed Mokhtar al-Bukhary owned Melati Pertiwi Sdn Bhd within the western edge of the South China Sea.
Xi turned the offer down.
The Chinese president reasoned that the ECRL and gas pipeline projects were not up for review as the state-owned Export Import (EXIM) Bank had already offered loans pursuant to terms agreed upon by all parties concerned. In a separate session, Li Keqiang noted that the loans were for works undertaken, deposits paid and purchases made by Chinese contractors and sub-contractors involved with the projects. The Chinese premier added that the stop work order issued to these contractors had resulted in significant losses that the smaller players were finding very difficult to bear.
On Sunday, the 22nd of July 2018, the Star Online put the number of workers retrenched as a result of the stop work order at 1,000 people. Quoting unnamed sources, the report alleged that the suspension affected a significant number of Chinese expatriates and senior executives who The Third Force was told were skilled and paid millions in compensations. An industrial source familiar with the matter, when met, related that the contractors also paid massive amounts in deposits for three year-long blanket orders to anticipate a rise in construction material costs.
Thus, when Mahathir sought a US40 billion loan from EXIM to offset losses in GST revenue suffered by the GoM and pay these contractors compensations (READ HERE OR FOLLOW LINK BELOW), Xi was dumbstruck. The Chinese president quickly pointed out that the idea of using money borrowed from China to pay China made no logical or ethical sense whatsoever and reminded Mahathir that the latter’s administration had repeatedly questioned China’s business ethics.
It was a firm “no.”
I am told, neither Li nor Xi would budge on terms previously agreed upon by the Najib administration. That explains why China’s Ministry of Foreign affairs spoke of the need to maintain bilateral ties despite Mahathir’s decision to cancel the projects. The Chinese were attempting to tell him that they “couldn’t give a hoot if the projects were cancelled as long as the GoM did its part by paying compensation.” Never once did Li or Xi agree with or tell Mahathir to do away with the projects as alleged by the Malaysian premier himself.
That lie is reflected in his latest U-turn regarding the status of the said projects. Yesterday, he told Malaysiakini that the cancellation wasn’t a sure thing as the decision was ultimately that of companies involved. However, for the past three months or so, he has been flipping back and forth between the projects being “on” to them being “off” by citing various reasons without once consulting the said companies. It seems that he was able to see though the Chinese Foreign Ministry’s “diplomatic chatter” and knows that China means business.
Mahathir understands that the Chinese will give him hell should he decide to play pucks with them. I am told, Xi has grown tired of his antics and has given him two months to consider the status of the projects. The Chinese president has no interest in our country’s fiscal woes or whatever Mahathir decides to tell Malaysians. All that concerns him at this very moment is if the Malaysian premier has the guts to abide by terms set by the Najib administration or compensate Chinese contractors affected by cancellations.
The ball is in Mahathir’s court.
To be continued…