Advertisement
Malaysia
AsiaSoutheast Asia

Malaysian contractors on China-backed East Coast Rail Link get better deal after US$240 million in funding agreed

  • Malaysia’s ruling coalition last year suspended the project along with other China-backed infrastructure deals, citing exorbitant costs and unfair terms
  • The 640km megaproject, which is part of China’s Belt and Road Initiative, was renegotiated to guarantee 40 per cent local participation

Reading Time:2 minutes
Why you can trust SCMP
Malaysia's Finance Minister Lim Guan Eng speaks at the signing ceremony to announce 1 billion ringgit in funding for Malaysian contractors to take part in the East Coast Rail Link project. Photo: Handout
Tashny Sukumaran
Malaysian contractors will be receiving a shot in the arm to help them participate in the China-backed East Coast Rail Link infrastructure megaproject, through a 1 billion ringgit (US$240 million) financing scheme.
Advertisement
The announcement of the scheme comes months after the 640km rail project, running from Kota Bharu on the east coast to Malaysia’s main sea gateway Port Klang on the west coast, was renegotiated to include 40 per cent local participation.

The Entrepreneur Development Ministry’s SME Bank will set aside the funds for contract financing, working capital and purchase of equipment, capped at RM50 million for each applicant, said Minister Redzuan Yusof at the signing ceremony between SME Bank, Malaysia Rail Link and China Communications Construction (CCC-ECRL) on Monday.

Officials, including Malaysia's Finance Minister Lim Guan Eng and Chinese ambassador to Malaysia Bai Tian attend the signing ceremony. Photo: Handout
Officials, including Malaysia's Finance Minister Lim Guan Eng and Chinese ambassador to Malaysia Bai Tian attend the signing ceremony. Photo: Handout

Describing the project as “an important economic and trade cooperation between Malaysia and China”, CCC-ECRL Managing Director Bai Yinzhan confirmed the project was preparing for full-scale civil works on multiple sites along a 223km stretch along the nation’s east coast, and that “at least” 40 per cent of civil works would be handed to local contractors.

Advertisement

The initial awarding of ECRL civil works packages to Malaysian subcontractors is already underway in stages for tunnels and temporary works along this stretch of the rail project.

The ECRL project, part of Beijing’s Belt and Road Initiative, was agreed to in 2016 by disgraced former Malaysian premier Najib Razak, who was voted out in 2018 and is currently on trial for multiple charges of corruption.
loading
Advertisement