The East Coast Rail Link (ECRL), a 620km high-impact project under the 11th Malaysia Plan (MP11), will be built and funded by China, Treasury secretary-general Mohd Irwan Serigar Abdullah confirmed today.
Speaking to Malaysian media upon arrival here as part of Prime Minister Datuk Seri Najib Razak’s delegation, he said the engineering, procurement, construction and commissioning (EPC) contract and a financing framework were among the agreements that he would sign during the visit.
According to NST Online, the EPC contract would be awarded to China Communication Construction Company Ltd (CCCC) while the financing agreement will be with Export-Import Bank of China (EXIM).
“The Chinese investment in Malaysia will open up smaller towns like Mentakab, Dungun, and going up to Tumpat,” Mohd Irwan said.
He said when completed, the ECRL would make products from the East Coast more competitive due to cheaper transport costs, and raise the income of industries and businesses located along the rail link route.
Mohd Irwan said the decision to seek financing from China was due to the favourable terms offered.
“If you borrow in the international market you will not get the low interest rate that we will get. We haven’t finalised (the details) but we will get very competitive (rate) and the repayment period we expect to be 20 years,” he added.
Mohd Irwan said the government hoped to finalise the ECRL by end of this year so that construction on the project can start in early 2017.