China to Fund and Construct RM55 Billion East Coast Rail

Mangalesri Chandrasekaran1 Nov 2016


The 620-km East Coast Rail Link (ECRL) will be funded and constructed by two firms linked to the Chinese government, according to Finance Ministry Secretary-General Dr Mohd Irwan Serigar Abdullah.

He told reporters that the financing agreement for the ambitious project will be signed with the Export-Import Bank of China, while the building contract is set to be awarded to China Communications Construction Co (CCCC) during Prime Minister Najib Razak’s visit to the country this week.

In total, the Malaysian Prime Minister is expected to sign 10 bilateral agreements during his six-day visit to China, including the two for the financing and construction of the ECRL.

“Looking forward to a fruitful visit to further strengthen Malaysia-China cooperation. Malaysia has enjoyed a strong bond with China and we are committed to further strengthening our ties and friendship,” PM Najib posted on his Facebook page upon his arrival to Beijing.

On Tuesday, he will meet Premier Li Keqiang, after attending the reception ceremony at the Great Hall of the People. Both politicians will bear witness to the signing of memorandums of understanding (MoU) between their respective countries covering areas of the economy, military, finance, construction, education and agriculture.




Estimated to cost RM55 billion, the ECRL will run through four Malaysian states. The mammoth railway project will connect Selangor’s town of Port Klang with Kelantan. It will also link smaller towns, like Mentakab in Pahang, Dungun (Terengganu) and Tumpat in Kelantan, with a goal to bring more jobs and business opportunities to the areas along the rail line.

“The Chinese investment in Malaysia will open up smaller towns like Mentakab, Dungun, and going up to Tumpat,” Dr Mohd Irwan told the New Straits Times (NST).

He explained that the Malaysian government has decided to accept China’s offer to fund the rail project due to the favourable terms they laid out. Although details of the financing agreement are still being finalised, the loan from Beijing is expected to come with a competitive interest rate and a tenure of 20 years.

“If you borrow in the international market you will not get the low-interest rate that we will get,” Mohd Irwan added.

The construction of the ambitious East Coast Rail Link, which is part of the East Coast Economic Region (ECER) corridor unveiled in 2007 to develop Malaysia’s east coast, is expected to start in early-2017.


Mangalesri Chandrasekaran, Editor at PropertyGuru, edited this story. To contact her about this or other stories email


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