KUALA LUMPUR: Malaysian Prime Minister Najib Razak urged China to complete the East Coast Rail Link (ECRL) before 2024, calling the project a game and mindset changer.
Mr Najib made the comments at the groundbreaking ceremony of the ECRL in Kuantan on Wednesday (Aug 9).
Last year, China extended funding to Malaysia to build the rail link connecting the east coast of peninsular Malaysia to its west coast, from Pengkalan Kubur in Kelantan to Port Klang in Selangor. The China Communications Construction Company was also awarded the contract for the procurement, engineering, and construction of the project.
Speaking at the ceremony on Wednesday, Mr Najib said 85 per cent of the RM55 billion (US$13 billion) project will be financed with a soft loan with 3.25 per cent interest from the state-owned Exim Bank of China. The loan will have a seven year moratorium, he added.
The remaining 15 per cent to be funded through Malaysia’s sukuk programme, which is managed by local banks.
The project, Mr Najib said, will cut travel time between Kota Bharu and Port Klang significantly from the current seven hours to four hours.
It will also stimulate growth in coastal states of Pahang Terengganu and Kelantan by 1.5 per cent and bring benefits to the combined population of 4.4 million in these states, he added.
The prime minister noted that the successful completion of the ECRL will provide an alternative trade route connecting the east and west coasts of peninsular Malaysia. The regional trade route centered on the Strait of Malacca may also leverage the ERCL to move a large volume of goods at a lower cost, he said.
The ECRL is expected to create 80,000 jobs, and about 5.4 million passengers and 54 million tonnes of cargo are expected to use the service annually by 2030.
Addressing concerns that the construction of ECRL will only benefit Chinese companies, Mr Najib said Malaysian contractors will be given at least 30 per cent of high impact projects.
The ground-breaking ceremony was witnessed by a large delegation of Chinese officials led by China state councillor Wang Yong, who was acting as special envoy of President Xijingping.
Mr Wang hailed the project as a flagship of China belt-and-road initiatives and a strong pillar of ASEAN connectivity.