KUALA LUMPUR, Dec 22 — After the multi-billion ringgit East Coast Rail Link (ECRL) project is completed, Malaysia could experience a surge in trade calls from China, a Singapore daily reported today.
Quoting officials in the field, the Straits Times said the new 620km rail route, which will connect the east and west coast of the Peninsular, could be a reason for China and several other trade partners to bypass Singapore to reach in North Asia.
"Cost issues aside, this new network will create new alternative routes to boost trade for Asean, with Malaysia as the base; and why this has to be taken seriously is because the Chinese have a direct interest in the [Kuantan] port and the rail link," G. Durairaj, managing director of maritime and logistics consultancy PortsWorld was quoted as saying.
The ECRL that will connect Port Klang to Gombak; Gombak to Dungun; and Dungun to Tumpat, is expected to start construction early next year.
Jaafar Ismail of Fergana Ventures, a local advisory company, was reported as saying that the link could be a "significant resolution" to China's dependency on the busy Malacca Strait.
Currently, the report said, almost 80 per cent of Chinese vessels pass through Malacca Strait and that with the ECRL, it would give them an alternative not to use the narrow channel.
The report also pointed to signs of development taking place in Kuantan, among others noting the BASF Petronas Chemicals plant and construction of new roads and flyover as well as other infrastructures.
The daily cited an unnamed government official confirming that RM8.9 billion worth of investment has since been generated in the eastern economic region.
Kuantan Port's general manager Mazlim Husin was reported as saying that an integrated 287-hectare site of a Chinese steel mill was an example used to explain the future impact of development in the industrial region there.
According to Mazlim, the steel mill would have an annual production of 3.5 million tonnes.
"This is the sheer size of just one project and the ECRL will attract more of these large ventures," he was quoted as saying.
On November 2, Malaysia and China reportedly agreed to the Framework Financing Agreement and Engineering, Procurement, Construction Contract for the US$13.10 billion (RM55 billion) rail link between the east and west coasts of the Malaysian peninsula.
The agreement was signed by Malaysia Rail Link Sdn Bhd and China Communication Construction Company Ltd, and witnessed by Prime Minister Datuk Seri Najib Razak and his Chinese counterpart, Li Keqiang.