Malaysia's Abdullah confirms: Multibillion dollar railway project is off

Malaysia's Abdullah confirms: Multibillion dollar railway project is off

Rohan Sullivan
Associated Press
Kuala Lumpur

Malaysian Prime Minister Abdullah Ahmad Badawi confirmed on
Wednesday the government would shelve a 14.5 billion ringgit
(US$3.8 billion) railway project approved by his predecessor,
saying he had other priorities.

Cabinet decided at its regular weekly meeting that
construction of the railway, which would have been Malaysia's
biggest-ever infrastructure project, will be postponed
indefinitely.

The decision was taken "because of the need to prioritize
Malaysia's many development projects," Abdullah said in a
statement after the meeting.

Cabinet discussed the project at its meeting last week, and
Abdullah said afterward he thought the project should be
postponed because it was too costly.

The postponement is the second major financial policy decision
of former Prime Minister Mahathir Mohamad that Abdullah has
reversed, and is seen as a sign that the newcomer is emerging
from the veteran leader's shadow.

Mahathir handed power to Abdullah, his hand-picked successor,
when he retired on Oct. 31.

Mahathir, who ran Malaysia for 22 years, was known to favor
massive infrastructure projects, such as the Petronas Twin
Towers, once the world's tallest.

Abdullah has said he wants to focus more on education and
social programs.

Weeks before he retired, Mahathir awarded construction
contracts for project - a railway running the length of peninsula
Malaysia - to a consortium headed by a businessman friend, Syed
Mokhtar Albukhary.

This was despite the government earlier signing letters of
intent awarding the project's two sections state-controlled
Indian and Chinese companies. Mahathir's decision raised fears of
trade retaliation, which didn't eventuate.

If it had gone ahead, the railway would have dwarfed the
previous largest public project, the 10 billion ringgit ($2.6
billion) Kuala Lumpur International Airport.

Within two weeks of taking office, Abdullah halted another
Mahathir plan - to list a government-held plantation cooperative,
Felda, on the stock exchange - saying it needed further study.