DUNGUN (Terengganu) - Malaysia on Thursday (July 25) relaunched its East Coast Rail Link (ECRL), kickstarting work on tunnels and viaducts along part of the route, from Dungun, in Terengganu, to Mentakab, in Pahang after a year-long suspension, and following a deal to slash costs.
“A supplementary agreement on the financing for the ECRL will be signed (with China’s Exim Bank) soon to finance 85 per cent of the project,” Transport Minister Anthony Loke said at the relaunch ceremony held at the site of a tunnel being built in the coastal district of Dungun.
As the cost of the project has been trimmed to RM44 billion, the government will pay less on interest, he added.
The interest payment on the loan “will be reduced to RM24 billion altogether, on the financing costs. So the total savings is RM12.6 billion,” project owner Malaysia Rail Link (MRL) chief executive officer Darwis Abdul Razak told a news conference.
Work on the China-linked ECRL project, which will connect Malaysia’s less developed eastern coast to the wealthier western coast, was suspended shortly after the Pakatan Harapan government, which assumed office last year, complained about its exorbitant price tag.
The cost of the project, approved by the previous Najib Razak administration, was subsequently reduced and the route shortened following negotiations on the contract.
The rail link is expected to spur investments as well as boost tourist arrivals.
“Many Chinese tourists are very aware of the beautiful islands in the east coast of Malaysia, but sometimes they are turned away by the difficulty of travelling to these islands. We believe with the completion of the ECRL, the Chinese tourism arrivals will double or quadruple in the years to come,” Chinese ambassador to Malaysia Mr Bai Tian said in his speech at the event.
Earthworks and excavation works have begun on several ECRL tunnel portal sites including a 871-metre Dungun Tunnel, 1.1-km Paka Tunnel and 2.8-km Kuantan Tunnel, while site clearing and pile testing for viaducts are being carried out on several sites in the coastal areas of Terengganu.
“We are ready for full-scale civil works, be it earthworks, foundation works and piling works on multiple sites along the 223-km stretch (from Dungun to Mentakab) in a bid to ensure the entire project is delivered in seven years,” said Datuk Seri Darwis.
In April, China reduced the price for the ECRL to RM44 billion from the original RM65.5 billion and also agreed to a 50:50 joint-venture to operate the 640-km line across Peninsular Malaysia, reducing Kuala Lumpur’s financial risks.
Local workers are expected to make up 70 per cent of the workforce.
Malaysia had previously said that it could not afford to terminate the agreement as compensation of RM21.78 billion would have to paid to Beijing.
A supplementary agreement inked between China Communications Construction Company (CCCC) and MRL on April 12 in Beijing paved the way for the resumption of work on the line that joins up the ports of Klang in the west, to Kuantan in the east, before heading north along the east coast towards Kota Baru, the capital of Kelantan.
Expected to be completed by December 2026, the ECRL will link Kota Baru to Putrajaya in 4 hours. About 10 per cent of the line was already built before the project was suspended in July last year.
Although the new alignment has been shortened from the 688-km planned earlier, it will have a new Southern alignment from Mentakab to Port Klang, Selangor.
The project scrapped a previous plan to cut through the Klang Gates Quartz Ridge in Gombak, Selangor, the world’s longest pure quartz dyke which the government is proposing as a UNESCO heritage site.
Instead, it will now travel south via Negri Sembilan, reducing tunnelling and adding integration to existing rail networks such as the MRT, the Express Rail Link to the Kuala Lumpur International Airport, and also the Malayan Railways intercity service.