KUALA LUMPUR, May 11 — More investments are expected to be pumped into the east coast of the Malaysian peninsula once the East Coast Rail Line (ECRL) and Kuantan port upgrading works are done, BMI Research said today.
The Fitch Group unit added that incentives from both the Malaysian and Chinese governments will provide long-term support in generating investments, particularly for the 3,000-acre Malaysia-China Kuantan Industrial Park (MCKIP) near the Kuantan port.
“The park (MCKIP) forms part of Malaysia’s East Coast Economic Region initiative, which also includes plans to expand the Kuantan port into a major regional shipping hub, adjacent automotive and petrochemical industries, and a new railway linking the region to Kuala Lumpur and Port Klang, Malaysia’s gateway on the western coast,” BMI said in a statement.
A direct port connection in the east of the peninsula it said, will also help secure alternative routes for energy products such as oil and gas, making the country less dependent on the current, single route via the Straits of Malacca, Singapore and the South China Sea.
“Peninsular Malaysia’s east coast is relatively underdeveloped compared to its industrialised and more affluent western coastal regions,” it said.
According to BMI, the first phase of upgrading the Kuantan port is expected to be completed by 2018 while the completion of the ECRL is expected to be by 2022.
Presently, most vessels from China go through Singapore to reach Port Klang.
This, BMI said caused shipment costs to go up, thus, impacting the overall supply chain of a business flow.
MCKIP, a maiden joint consortium between Malaysia and China, was established to drive industrial development and trade between both countries.
Last year, the park reportedly secured RM5.6 billion in investments, therefore, increasing the total approved and committed investments to RM19 billion.
