East Coast Rail Link project in Malaysia may resume on a smaller scale. Credit: Hideki Yoshida.

Construction works on the suspended $20bn East Coast Rail Link project in Malaysia may resume, according to local reports.

Malaysian Prime Minister Dr Mahathir Mohamad told local Chinese newspaper Sin Chew Daily that the project can be resumed on a smaller scale, provided China agrees to it.

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The 688km-long East Coast Railway Link is a part of China’s Belt and Road initiative. It aims to connect the eastern coast of the Malaysia Peninsula with shipping routes in the west through a railway link.

“The government is planning to scale down the project, as well as explore other avenues to reduce expenditure.”

The project was halted in July last year by the Malaysian authorities citing ‘national interest’ among other reasons.

Mohamad also said that the two countries are currently discussing the project and are yet to arrive in a decision.

The government is planning to scale down the project, as well as explore other avenues to reduce expenditure.

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Mohamad was quoted as saying: “What we are trying to do is to ensure that we will not spend much money while China will not suffer a loss.”

The project construction was to be handled by China Communications Construction Company, while the Chinese Export-Import Bank was supposed to provide the financing.

Last September, the government also postponed the high-speed rail project between the Malaysian capital of Kuala Lumpur and Singapore until the financial situation of Malaysia improves.