China Asks for 'Friendly Consultation' in Malaysia Pipeline Dispute

(AP) - The Chinese government has expressed hope for a “friendly consultation” with Malaysia to resolve a dispute of the building of two multibillion-dollar gas pipeline projects.

The two projects, along with a large rail project, were being constructed by a subsidiary of China’s state-owned China National Petroleum Corp. (CPP).

The government of Malaysia seized $243 million from the company’s bank account on Monday as repayment for uncompleted work, according to the Malaysian Prime Minister.

"They took from the government 80 percent of the contract price but they delivered only 13 percent so for the part they have not delivered, the government is claiming back the money," Prime Minister Mahathir Mohamad said. "I don't see why the Chinese will feel unhappy about it because we are not taking back money for work they have done. We are taking back money for work they haven't done."

Mahathir said Malaysia was entitled to reclaim the money, as over 80 percent of the cost had been paid out but only 13 percent of work completed.

Geng Shuang, a spokesman for China’s Foreign Ministry said the work was "carried out in accordance with the contract."

He stressed the two countries enjoy a "long-term friendly cooperative relationship" and that Beijing is confident of working with Malaysia to further deepen economic and trade ties. "For problems arising in cooperation, the two sides should properly resolve them through friendly consultation."

Mahathir has reviewed several large-scale government projects after winning a historic election in May of 2018. The previous government led by Prime Minister Najib Razak has been accused of corruption after a massive financial scandal broke at 1MDB, the state’s investment fund last year. Najib is currently on trial for multiple corruption charges linked to the scandal.

The new government is currently investigating whether any money from the scheme was used to fund the Chinese-backed projects.

In April, Malaysia renewed the rail project after the Chinese contractor reduced the cost by one-third to $10.7 billion.

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