China Railway Construction 17th Corporation (CRCC 17) has been accused of defaulting on payments to local Malaysian contractors and suppliers since last year.

Local media reported that on Wednesday, September 14, the contractors and suppliers gathered at the construction site near Shah Alam ten miles southwest of  Kuala Lumpur, to hold a peaceful protest regarding multiple debt collections.

CRCC is a state-run corporation responsible for constructing the GS05 and GS06 supporting projects of the Light Rail Transit Line 3 (LRT 3) in Malaysia.

Pulled-up banners printed in four languages, Malay, English, Chinese, and Tamil, said: “Please pay our debt” and, “Condemn the 17th Bureau of China Railway Construction.” They demand CRCC 17 to repay the arrears owed for more than one year, totaling about six and a half million dollars.

Rozani Aziz, managing director of Izani Wawasan Enterprise (IZW) PTE Ltd, told the media, “Since a year ago, although our contractors and suppliers have completed the two supporting projects appointed by GS05 and GS05, the CRCC 17 has not paid the relevant project costs.”

Rozani pointed out: “The project leader of CRCC repeatedly promised us every month that he would pay, but the promise was not fulfilled. Every time we asked CRCC to liquidate the unpaid amount, it still did not materialize.”

“We only hope that they will pay back the money as soon as possible, otherwise, we will entrust a lawyer to take further legal action.”

Jacky Chan, managing director of CTSM Geotechnology, told reporters, “We are a subcontractor who has been working hard on this project. We have persisted for so long because this is a government project, and secondly, because our main contractor is CRCC 17, a Chinese state-owned enterprise, we believed that they would honor everything we have done for them and pay for our project. But in the end, the contract was terminated, and we did not get the project fee. They gave us a lot of promises, saying that they would pay us during the entire project, but the payment speed was very slow, and almost no payment was made to us.”

Jacky Chan revealed that they have therefore written to many government agencies, including the Chinese embassy, to seek help and bring attention to the matter. Still, they have not received any positive support. Therefore, there wasn’t any way to express their despair, so they held a peaceful protest to send a clear message to the public, the media, the government, and the Chinese government that they need help to solve the problems.

In addition to the two mentioned subcontractor companies, there are at least 15 other subcontractor companies affected.

The owner of the LRT3 project is the National Infrastructure Corporation of Malaysia, a 100% state-owned enterprise controlled by the Malaysian government. The main contractor for the project is Setia Utama Ltd. The project started construction in mid-2016 and has completed 80% so far.

According to the China Daily, Dai Aimin, the head of CRCC 17, responded on Sept 15 from Chongqing and confirmed the total $8.2 million debt. he said that the head office agreed to pay 25% (about $2 million) at the end of September. For the remaining 75% debt, the head office will repay $1,200 per month until it is fully repaid in February next year.

Dai added that CRCC 17 has no intention of defaulting on project fees. However, the company is facing financial problems, and the project budget to develop the third Light Rail Line (LRT 3) has been cut. Since 2018, the company has lost a total of $8 million.

However, one of the contractor representatives who requested anonymity said that local contractors are facing a lack of funds to operate. He hopes that CRCC 17 will be able to pay the arrears in full as soon as possible instead of repaying the money in installments.

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