China to construct East Coast railway in Malaysia
The ambitious 620 km rail line will be funded by China, and is expected to cost around RM55 billion.
The construction of the 620 km East Coast Rail link in Malaysia is expected to start as early as 2017, with funding and labour to be provided by two firms linked to the Chinese government, reported Bloomberg, citing a senior Putrajaya official.
Mohd Irwan Serigar Abdullah, Secretary General to the Treasury of Malaysia’s Ministry of Finance, said the financing agreement for the ambitious project will be inked 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.
The former is one of China’s three institutional banks chartered to implement state policies across different sectors, while Hong Kong-listed CCCC is majority owned by the government.
According to Irwan, the Malaysian government has decided to accept China’s offer to fund the rail project due to the favourable terms laid out. Although details of the financing agreement are still being fine-tuned, the loan from Beijing is expected to come with a competitive interest rate and a tenure of 20 years.
The ambitious rail line, which will run across the east coast of peninsular Malaysia, is estimated to cost around RM55 billion (S$18.3 billion), said PM Najib in October.
Meanwhile, a report from The New Straits Times revealed that Putrajaya hopes to close the funding and building deal before the end of this year.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg
