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Transcript Of Mahathir Press Conference, Beijing, 21 Aug 2018

What is the progress of the renegotiation of the contracts?

That will be done at the official level. My job is to establish principles that investing in Malaysia is not about bringing in workers and all that. It is about bringing in capital and technology. It is not workers. We want our people to be employed.

What was the outcome of the ECRL?

The officials will be able to handle but as for me, I explained to them why we cannot have the ECRL and why we cannot have the High Speed Train. It is all about borrowing too much money which we cannot afford which we cannot repay and also because we do not need these projects at this moment in Malaysia. Maybe later on, yes. But now we do not need it. So our problem is how to solve our financial deficit. 

So how was the response from China?

They agreed. But how to do this, will be left to the officials. They will negotiate.

But the ECRL has already drawn 80% of the loans?

Yes, but not the full amount. More than 80% for some projects. But ECRL has not reach 80% yet and the work done is only 13%. So we need to find out where the money is as the work is not done. All these will be renegotiated by our people. 

So the project is cancelled?

The project will not go on because at the money we do not need it. Later when we need it we will raise that but at the moment the priority is for us to reduce our debt. That debt, that is the fault of Najib. 

Is it right for us to report that you say ECRL will be cancelled for the moment?

For the moment yes. It will be deferred until maybe when we can afford and reduce the costs of loans. 

So the Chinese responded positively?

The Chinese didn’t talk about the companies. The talk about the Government. They see our point of view. I explain to all the 3 leaders why we have to do this. And not one of them say no. They understand our problem and they understand why we have to cancel it. 

So all 3 leaders responded positively?

Yes. I spoke to Premiere Li, the President as well as the Head of their Party.

What about the pipeline projects?

Same. We do not find the need for those, they cost too much money and we cannot afford it. So we have to cancel it or defer it to a later date. 

Do we Malaysia have to pay compensation?

We have to pay compensation. This is the stupidity of negotiation before. Why do we enter into such agreement? We pay huge compensation if we do not go ahead. There must be agreed clauses in all agreement and the agreed clauses must be fair to both parties. But here if we cancel, we have to pay huge sum of money, such as the High Speed Train. 

Are you talking about compensation of ECRL or HSR?

China is the contractor of ECRL. And they lend the money. And we have explained to them that we cannot afford it. So we must find an agreed way to exit the project at the lowest costs possible. 

Lowest costs possible?

We will have to pay compensation and all that. But this is our own people’s stupidity. You cannot blame the Chinese for that. 

How much compensation do we have to pay?

For ECRL we have not worked out that yet but it will be quite substantial.

What about compensation for pipelines?

We also have not worked out that yet. 

Money has already been drawn down for these projects. So will you be asking for the money back?

We will recover the money from Najib. He was the one who entered into it. I have never heard a contract where you pay on time without completing the project. Normally you pay according to the work done. What kind of stupidity is this? 

Question (inaudible)

They will have to conform to our rules. I emphasized that when we come to China, we follow Chinese rules and Chinese laws. But they come to Malaysia, they must follow Malaysian laws and rules. This happened because the government of Datuk Seri Najib overlooked all the finance practices and entered into an agreement which is very detrimental to our interests.  

Question (inaudible)

The High Speed railway line from Kunming to Singapore was our idea. I have proposed that to Goh Chok Tong and proposed to Chinese that it is good to have a railway line connecting Singapore to Kunming. And because I mentioned Singapore, Goh Chok Tong was very excited. He was happy. But we do not have the money, so we have to postpone. The Chinese responded by having a line through Laos to Bangkok. We already have a line from Bangkok to Singapore. So we are half connected. It was our idea, Malaysia as we want to connect our country and others. 

Is the High Speed Railway necessary for us?

The HSR is not necessary. Because our plan was only for 220km/h. But the HSR speed here is 300km/h. So you can do the journey in less than an hour. For a High Speed Rail, you need long distance. If you have to travel 8 hours and now with High Speed Rail you only need 3 hours, then there is a savings of time of 5 hours. But to travel from Singapore to Kuala Lumpur and you need to pay for a high speed train, then you will be very stupid. 

You talked about hoping the Chinese to help Malaysia financially. Does that mean the Malaysia government will issue bonds to the Chinese?

If we issue bonds, anybody can buy. Whether by government or agencies. But not at the terms we previously gave to Goldman Sachs. Goldman Sachs get 10% of the money we raised. This is stupid. 

Did the Chinese show interests?

We did not mention that. 

Any pressure from the Chinese side on ECRL, or other projects?

No pressure. We only talked about the financing.

Recently you mentioned about colonialism in an interview. Were you referring to China?

I was not talking about any specific country. If you remember, President Sukarno talked about new colonialism, which is using economic pressure to control you. We do not want anything of that. Economic pressure on us will not be accepted. But it is the government of Malaysia wanting to borrow money which they are lending us to solve our fiscal situation. 

(What is the way forward for KL-Beijing relationship under your administration?(

I am known in China as being China friendly when I was Prime Minister before. And I think I can prove to them that I am China-friendly as I was before. And now I managed to convince the Chinese businesses. 

So you managed to mend relationship with China even after cancelling the projects?

There was a misunderstanding. But now they understand why we have to do it. I do not think China wants to see Malaysia bankrupt. My job is to explain myself.

And now they understand?

They were very friendly. The Prime Minister was friendly, the President was friendly. Even the Chairman was friendly. They did not say “why are you doing all these? We want to throw you out of China.” No. They even send their full motorcycles to escort me. 

Will you invite them to KL?

I have invited Xi Jinping, and Chairman of the Communist Party has already contacted the Speaker of Malaysia Parliament to invite him to China. 

So how is the relationship?

You do not have to worry about this, about my relationship with the Chinese. I used to be called the Malay ultra. In the end it was the Chinese votes that gave me two-third majority in 1999. Now is Malay votes. 

Did you ask them about Jho Low? Is Jho Low here in China?

I did not ask about Jho Low. I think he is probably in China. I am told from rumours that this man is very sneaky. He has many passports like all crooks. He can use his passports to travel, but now he cannot use his Equanimity.

If Jho Low is here next to you, what will you tell him?

I will put a handcuffs on him.

Do you believe the rumours that China is harbouring him?

I do not know. People say all kind of things.

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