Malaysian leader says China-backed rail project too costly

KUALA LUMPUR, Malaysia (AP) — Malaysian Prime Minister Mahathir Mohamad says that a multi-billion-dollar rail link project backed by China would "impoverish" the country, saddling the government with excess debt for the next 30 years.

Since winning a historic vote last May, Mahathir's government has axed or reviewed large-scale infrastructure projects to rein in surging national debt that it blames mostly on corruption in the previous government.

But there is confusion over the status of the $20 billion East Coast Rail Link. Mahathir's comments Tuesday suggested it might be canceled.

Mahathir said the government "just cannot pay" as the project cost could exceed 100 billion ringgit ($24.3 billion). He said paying compensation would cost less.

A Chinese government spokesman in Beijing said the project was agreed to "on the basis of mutual respect and equality."