Malaysia's China-backed rail project to cost more with extended line

©Kyodo News

Malaysia said Monday a China-backed railway project will now cost 14 percent more but with a longer line that it hopes will spur cargo traffic linking the east coast port of Kuantan facing the South China Sea to west coast ports facing the Straits of Malacca.

These are the third changes to the East Coast Rail Link that was one of the showpiece infrastructure projects under China's Belt and Road Initiative and was launched in 2016 during former Prime Minister Najib Abdul Razak's administration.

The double-track, 688-kilometer railway line carried a price tag of 65.5 billion ringgit ($15.82 billion) then and faced being canceled when Najib was deposed in the May 2018 election.

His successor, Mahathir Mohamad, who turned the project into an election issue, had questioned the viability and dubious terms of the project, warning it could turn into a white elephant and ensnare the country in a debt trap.

When he came to power, he forced China back to the negotiating table and in April 2019, announced that the project would be built at a reduced price of 44 billion ringgit, with the line shortened to 640 km.

China Communications Construction Co. is the engineering, procurement, construction and commissioning contractor for the project, with 85 percent of the funding coming from the Export-Import Bank of China.

Mahathir's government, however, collapsed in February 2020 due to political desertion, and the new Transport Minister Wee Ka Siong said Monday that Prime Minister Muhyiddin Yassin's government has agreed to a new alignment that will lengthen the line to 665 km with a price tag of 50 billion ringgit.

The line stretches from Kota Baru, the capital of the northeastern Kelantan state, to Port Klang, the country's major port city on the central west coast.

Wee said it "will serve as a 'land bridge' from Kuantan Port to two terminals at Port Klang, namely Northport and Westport."

A major difference is the new line omits the route to Port Klang via southern Negeri Sembilan state.

Instead, it will follow part of the original route proposed during Najib's administration but was scrapped by Mahathir's government -- that is, it will go through Bentong town in Pahang state, Gombak and Serendah towns before ending in Port Klang. The latter three are in Selangor state.

The new alignment, Wee told reporters, "offers value for money as it will extend rail connectivity to existing cargo hubs as well as increase the capacity in the transfer of cargo via the rail network."

The government believes the East Coast Rail Link is viable and targets a revenue ratio of 70 percent from freight and 30 percent from passengers.

Wee cited rail industry research forecast that it may transport some 26.12 million tons of freight in its first year of operation, higher than the 9 million tons expected if the old route via Negri Sembilan state were followed.

The new alignment also is said to be able to attract 5.03 million passengers. Traveling time to Kuala Lumpur, via the Gombak terminal, from Kota Baru will also be slashed to only four hours instead of the average seven hours by road.

Wee said despite the realignment, the project is still on-target to be completed within seven years, with operations to commence in 2027. Currently, the construction of the project is 21.39 percent completed, concentrating on the northeastern coast section.