BEIJING: China is set to build and finance the RM55 billion (US$13.1 billion) East Coast Rail Line (ECRL) project that will span four states in peninsular Malaysia, according to Malaysia's secretary-general to the Treasury.
Dr Irwan Serigar Abdullah said Malaysia and China will sign the Framework Financing Agreement and Engineering, Procurement, Construction (EPC) Contract for the project on Tuesday (Nov 1).
Dr Irwan spoke to Malaysian media upon arrival in Beijing on Monday as part of the delegation accompanying Prime Minister Najib Razak who is on a six-day visit to the Chinese capital.
He said the railway link will lower transportation costs between the west and east coasts of peninsular Malaysia, bring down prices of goods and reduce travelling time.
"It will also will help create more jobs and business opportunities for Malaysians, especially the rural folks," Dr Irwan said.
Although the agreement has not yet been finalised, Dr Irwan said the financing offered by China was a lower rate compared to the international market, coupled with a long repayment period of 20 years.
He said the project was crucial to Malaysia and should not be delayed as it would not only spur the country's transportation industry development, but also help to speed up growth of small towns along the way.
The project would also assist in the transfer of technology in the railway industry, he said. "Future development of railways is the in thing, and Malaysia needs to make the move in getting the technology and new systems in railway construction,"he said.
Dr Irwan said the project will be built in phases: First from Port Klang to Dungun in Terengganu followed by Dungun to Tumpat.
PM Najib, in tabling the 2017 Budget, said the project would be launched in phases and would connect townships such as Port Klang, ITT (Integrated Transport Terminal) Gombak, Kuantan, Kuala Terengganu, Kota Baru and Tumpat.
The construction of the project is expected to start next year and it is due to be complete by 2022.