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China's CCCC reiterates it has not given up on Malaysia rail project

Company says it has proposed plans to lower construction cost of East Coast Rail Link

Malaysia has halted construction on the East Coast Rail Link project. (Photo by CK Tan)

HONG KONG (NewsRise) -- China Communications Construction Co. executives on Wednesday reiterated the infrastructure company has not given up on the multibillion-dollar East Coast Rail Link in Malaysia, on which development work has been suspended for months amid doubts over the project's financial viability.

"We have proposed feasible plans that can lower the construction cost by an appropriate amount," Company Secretary Zhou Changjiang told reporters at a news conference in Hong Kong on Wednesday. "We are proactively communicating with the Malaysian government. ... We have never given up on this project and we have been improving our design to push this project ahead."

The state-owned company in July said that it had received a notice to suspend all work on the East Coast Rail Link project, which it had taken on as an engineering, procurement, construction and commissioning contractor. The government of Malaysian Prime Minister Mahathir Mohamad had previously said that the project will be financially viable only if CCCC sharply cut the pricing.

If the Malaysian government agrees to go ahead with the project under the initial pact, it will cost the country up to 130 billion ringgit ($31.7 billion), Mahathir had said last month.

CCCC had signed the contract in the first half of 2017 as part of the Belt & Road Initiative, before conducting initial design and preparatory work in the second half of that year, Zhou said. The company began work early last year, before it was suspended in July, he said.

"The advance payment that we received could totally cover the cost of these works. We didn't make any advance payments, so we don't need to make any provisions," he said on Wednesday.

The Belt & Road Initiative is a geopolitical strategy promoted by Chinese President Xi Jinping with the intention of deepening Beijing's economic and political ties with a large number of countries across Asia, Europe and Africa.

Shares of CCCC were down 0.5% as of 3:46 p.m. in Hong Kong on Wednesday, while the city's benchmark Hang Seng Index was down 0.1%.

-- Benny Kung

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