KUALA LUMPUR • Malaysian Prime Minister Mahathir Mohamad said yesterday the "unfairness" of contracts for Beijing-backed projects was a key issue he would raise during a visit to China next month.
Tun Dr Mahathir, who took power in May following a stunning election victory, is reviewing major projects signed by the former government, saying many of them do not make financial sense for Malaysia. His government suspended more than US$20 billion (S$27.2 billion) in China-funded projects earlier this week.
"There are several issues to be brought up, among which is the unfairness of the terms of the contract and also the loan," Dr Mahathir said at a news briefing. "And the interest also is of concern to us, because the interest is much higher than when governments borrow."
Dr Mahathir has been highly critical of the benefits of certain Chinese projects in Malaysia. Since taking office, he has vowed to renegotiate terms even as construction work continued.
The Finance Ministry this week called a halt to work on three projects: the US$20 billion East Coast Railway Link and two pipeline projects worth US$2.3 billion. Chinese state-owned firms are involved in all three projects.
"I want to go to China as early as possible, but the President of China is not available in July, so I'll go in August," Dr Mahathir, who turns 93 next week, said at the briefing.
Reuters reported on Thursday that his trip to Beijing had been provisionally agreed for mid-August.
China's Foreign Ministry, in a statement sent to Reuters, said Dr Mahathir was a "politician familiar to the Chinese people" who had visited the country many times and made important contributions to the development of relations. "We welcome him to visit China at a convenient time for him, and are willing to remain in touch with the Malaysian side on the timing," it added.
Dr Mahathir's visit will likely be preceded by a trip to China this month by former finance minister Daim Zainuddin, two sources and media reports said. Tun Daim was appointed by the premier to a Council of Eminent Persons - a special team advising the government.
"I think he wants to talk with the Chinese about some contracts," Dr Mahathir said when asked about Mr Daim's likely trip, adding that he reserved the right to reject his advice.