Construction starts on Malaysia's $13bn East Coast Rail Link project

China and Malaysia have started construction on the $13bn East Coast Rail Link (ECRL) project in Malaysia, which is being developed as a part of China's 'Belt and Road' initiative.

The 688km rail line will run through the Peninsular Malaysia and is expected to connect various ports at the South China Sea towards the Thailand border in the east with the Straits of Malacca's shipping routes in the west, reported Reuters.

Malaysia Prime Minister Datuk Seri Najib Tun Razak was quoted by Bernama as saying: “The ECRL project also sets the tone for an economic spin-off effect and positive social impact for the east coast states.

“It will be a catalyst for economic equality between the west and east coast as it will stimulate investment, spur commercial activities, create ample jobs, facilitate quality education and boost tourism in Pahang, Terengganu and Kelantan.”

The project is being built by transportation infrastructure group China Communications Construction.

A loan from China Exim Bank is set to finance 85% of the development, while the remaining 15% funding will be procured through a bond programme managed by local investment banks.

China's Belt and Road initiative intends to develop a modern ‘Silk Road’ pathway to connect China with Southeast Asia and Central Asia via land, and to the Middle East through shipping routes.

Razak said that the ECRL will connect key economic industrial areas such as the Malaysia-China Kuantan Industrial Park and Gambang Halal Park in Pahang, Kertih Biopolymer Park (Terengganu) and Tok Bali Integrated Fisheries Park (Kelantan) with the East Coast Economic Region (ECER).

The ECRL is expected to be completed by 2024.