Launch of China-Malaysia rail link signals stronger ties

KUALA LUMPUR • Prime Minister Najib Razak will cement his administration's growing economic ties with China today with the launch of a rail link being touted as the most expensive infrastructure venture under Beijing's ambitious Belt and Road Initiative.

Datuk Seri Najib and China's State Councillor Wang Yong will be in Kuantan to preside over the ground-breaking ceremony for the RM55 billion (S$17.7 billion) East Coast Rail Link (ECRL) project.

Mr Wang is leading a high-powered delegation comprising top officials from China's security and economic agencies.

China is funding the 620km-long rail link stretching from Tumpat town, near Malaysia's border with Thailand, to Kuantan Port, before cutting through the mountainous central region to Port Klang, Malaysia's busiest port.

The project, which will take five years to complete, carries huge economic implications. Private economists and transportation consultants say the land bridge could significantly alter trade routes for the 10-nation Asean grouping, which China views as its southern hinterland.

The project also carries a powerful security dimension. As China pushes ahead to establish its dominance over the South China Sea, the land bridge will become the first major link to the Strait of Malacca, which Beijing considers vital to its overall security.

Malaysian officials said Mr Wang's presence today underscores the importance of the ECRL project to China. The high-ranking Chinese Communist Party official is here as the special representative of President Xi Jinping.

The ECRL, which had been on the drawing board since 2007, got a boost late last year when China declared it would fund and take a lead role in its construction. Within weeks, the project was awarded to state-owned China Communications Construction Company.

The dizzying pace at which the project has been rushed through drew criticism from Malaysia's opposition over the Najib administration's increasing tilt towards China.

Opposition leaders argue that the ECRL is unlikely to generate sufficient revenues to repay the huge loan Malaysia is taking from China to fund the project. What's more, critics note that Chinese companies, and not Malaysian enterprises, are likely to benefit from the construction of the project.

Mr Najib dismissed the concerns yesterday as "scaremongering".

He and Mr Wang are also expected to discuss the possible local listing of Edra Power Holdings. The power company was formerly owned by state fund 1Malaysia Development Berhad, which sold it to state-owned China General Nuclear Power Corp for RM10 billion in 2015.

Leslie Lopez

A version of this article appeared in the print edition of The Straits Times on August 09, 2017, with the headline 'Launch of China-Malaysia rail link signals stronger ties'. Print Edition | Subscribe