Malaysia dismisses claim of preferential treatment for China investors in East Coast Rail Link project

Works being carried out to dig a tunnel for the East Coast Rail Line project Section 4 in Dungun, Malaysia, on March 28, 2018.
Works being carried out to dig a tunnel for the East Coast Rail Line project Section 4 in Dungun, Malaysia, on March 28, 2018.PHOTO: BERNAMA

KOTA BARU (THE STAR/ASIA NEWS NETWORK) - Malaysian's government has dismissed claims it is giving preferential treatment to China's investments in the country such as the East Coast Rail Link (ECRL) project by granting them relief from the Goods and Services Tax (GST).

International Trade and Industry Minister Mustapa Mohamed said on Tuesday (April 17) that many government projects were given relief from the GST.

"This is nothing out of the ordinary. We do not give special, preferential treatment to certain people," he told a press conference in the Kelantan state capital Kota Baru.

Datuk Seri Mustapa was commenting on allegations made by the opposition Parti Amanah Negara vice-president Husam Musa who had showed documents the China-owned Communications Construction Company (CCCC) was given GST relief for the ECRL project.

The Chinese company is undertaking the RM55 billion (S$18.5 billion) mega railway project, which links Malaysia's east and west coasts, with the Malaysia Rail Link Sdn Bhd Head (MRL).

The ECRL stretches 688km from Port Klang in Selangor to Tumpat in Kelantan and is expected to be completed by June 2024.

The document uploaded on Mr Husam's Facebook page was a certificate of GST relief for the acquisition of goods and services for the ECRL project and issued in the name of China Communications Construction (ECRL) Sdn Bhd.

 
 
 

The certificate was accompanied by a letter with CCCC's letterhead informing its supplier that it was granted GST relief, based on a letter by the Finance Ministry dated Feb 7.

"In fact, a few government projects have been given GST relief," said Mr Mustapa, adding that the claims were made on purpose to confuse the public.

"It is the government's policy that certain projects will be given GST relief, not just projects from China," he said.

Prime Minister Najib Razak, who recently launched the groundbreaking ceremony of the ECRL project in Kota Baru, called it a game changer as it would create more than 80,000 jobs for locals.