Saturday, 25 February 2017

Malaysia's ECR touted as a game changer

Land being reclaimed to expand Kuantan Port, which is central to the East Coast Rail Line project.FOTO: KUANTAN PORT

In a remote nook along Peninsular Malaysia's east coast, millions of tonnes of sand are being dredged up from the South China Sea to get Kuantan Port ready for the country's priciest infrastructure project yet: a RM55 billion (S$17.7 billion) railway link financed by China.

The East Coast Rail Line project (ECRL) will connect ports on the east & west coasts of Peninsular Malaysia & could alter regional trade routes which currently ply between the busy Strait of Malacca & the South China Sea via S'pore, officials say.

This potential game changer gives a glimpse of China's ambitions to expand its economic clout in Asia and beyond. And it explains why land is being reclaimed at such a frenzied pace at Kuantan Port.

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Tracking the East Coast Rail Line


The East Coast Rail Line (ECRL) came under scrutiny by opposition representatives long before Prime Minister Najib Abdul Razak made the official announcement.

The rail line aims to connect the less developed east coast to the more developed west coast of Malaysia, which is otherwise difficult to reach due to the Titiwangsa mountain range standing in between the two regions.

What is the ECRL all about and how did it become so controversial? Malaysiakini explains the issues in this latest instalment of KiniGuide.

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EAST COAST RAIL LINE (ECRL) PROJECT
Figure 1: ECRL route in the ECER

Suruhanjaya Pengangkutan Awam Darat (SPAD) and the East Coast Economic Region Development Council (ECERDC) have jointly launched a market sensing exercise to gauge market interest and seek views via a Request for Information (RFI) for the East Coast Rail Line (ECRL) project on 15th March 2016.

The East Coast Economic Region (ECER), is an area measuring more than 66,000 square kilometres or 51% of the total area of Peninsular Malaysia with a total population of 4.43 million (2014). ECER covers the states of Kelantan, Terengganu and Pahang, as well as the district of Mersing in Johor as shown in Figure 1.

Infrastructure development is critical to the growing ECER and rail is a key enabler for the region that can connect economic centres including industrial areas and provide a link to Greater Kuala Lumpur/Klang Valley efficiently. To unlock this growth, ECRL has been identified as a high impact infrastructure project that will form the backbone of ECER's multimodal transport infrastructure. This will complement existing road/expressway infrastructure as the Lebuhraya Pantai Timur and the existing KTMB East Coast Line and ports.

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Malaysia - East Coast Rail Line (ECRL) project joint market sensing exercise

The Government of Malaysia have recently launched a Joint Market Sensing exercise via a Request for Information (RFI).

The purpose of the exercise is to gauge market interest and gather from the railway industry players' opinion on commercial and technical aspects of the project.

Infrastructure development is critical to growing the ECER and rail is a key enabler for the region that can connect economic centres including industrial areas and provide a link to Greater Kuala Lumpur/Klang Valley efficiently.

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China to pour in billions for rail project

State visit: Prime Minister Datuk Seri Najib Tun Razak arriving to a red carpet welcome at Beijing International Airport. The Prime Minister, accompanied by his wife Datin Seri Rosmah Mansor, is on his third official visit to China. Last year, bilateral trade between China and Malaysia stood at US97.3bil (RM408.6bil) while it has reached US54.3bil (RM228bil) up to August this year. — Bernama

CHINA will provide RM55bil in soft loans to Malaysia for the construction of the planned East Coast Rail Line (ECRL) that is estimated to cost a similar amount, according to Transport Minister Datuk Seri Liow Tiong Lai.


In an exclusive interview in Beijing with The Star yesterday, Liow said this will be one of the 16 government-to-government memoranda of understanding to be signed when Prime Minister Datuk Seri Najib Tun Razak meets with Chinese Prime Minister Li Keqiang for bilateral talks today.

Apart from financing, the two countries will also sign an engineering-and-construction contract on the project.

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China set to build, finance Malaysia's East Coast Rail Line project

Malaysia's Prime Minister Najib Razak (L) shakes hands with Chinese President Xi Jinping during a meeting at the Diaoyutai State Guesthouse in Beijing on May 30, 2014 AFP/Jason Lee

China is set to build and finance the RM55 billion (US$13.1 billion) East Coast Rail Line (ECRL) project that will span four states in peninsular Malaysia, according to Malaysia's secretary-general to the Treasury.

Dr Irwan Serigar Abdullah said Malaysia and China will sign the Framework Financing Agreement and Engineering, Procurement, Construction (EPC) Contract for the project on Tuesday (Nov 1).

Dr Irwan spoke to Malaysian media upon arrival in Beijing on Monday as part of the delegation accompanying Prime Minister Najib Razak who is on a six-day visit to the Chinese capital.

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M'sia-China move closer towards cementing ECRL project
RM55 billion East Coast Rail Line project will lower transportation costs in Peninsular Malaysia, lower prices of goods and reduce travelling time

Malaysia and China will sign the Framework Financing Agreement and Engineering, Procurement, Construction (EPC) Contract for the RM55 billion East Coast Rail Line (ECRL) project.

Treasury Secretary-General, Irwan Serigar Abdullah, said if the financing for the project could be finalised by year-end, the new double-track rail project connecting Port Klang, Selangor to Tumpat, Kelantan could take off by next year.

He said the spin-offs of the project would be lower transportation costs between the west and east coasts of Peninsular Malaysia as well as the lower prices of goods besides a marked reduction in travelling time.

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China-Malaysia Plan Third Port Klang Terminal




In a bid to handle the increase in shipping activity in the region, China and Malaysia are currently in talks to build a third terminal at Port Klang, which has also been proposed in response to China’s One Belt, One Road plan, according to Free Malaysia Today.



This follows news that China and Malaysia were to announce a collaboration project with Malaysia for two key ports in both countries.

The initiative is set to open up more business opportunities between both Port Klang and China’s Lianyungang Port.

related:


Giant Carey Island port in the works
End of the day: Several ships plying the Malacca Strait in the background as a couple takes in the sunset on a beach in Carey Island

Northport. Westport. And next up is Carey Island, a massive port-industrial city project, with infrastructure investments of more than RM200bil covering an area of over 100sq km – more than twice the size of Putrajaya.

This giant new port will also be able to handle more cargo than the two existing ports combined.

According to Tan Sri Kong Cho Ha, chairman of Port Klang Authority (PKA) and Malacca Port Authority, the 20-year project will comprise the development of an integrated port and related infrastructure, industrial parks and free trade zones, commercial and residential buildings.


Carey Island to get mega port

Malaysia on Sunday confirmed the construction of a giant port in Pulau Carey, which would clash with plans for two big ports coming up in nearby Malacca.

In January, Malaysia’s Port Klang Authority (PKA) said it wanted to build a giant port on an island next to the country’s largest port.

The RM200 billion (S$64 billion) project with its 13,000ha, is about 25 times the size of Singapore’s Sentosa Island.


Shenzhen to Port Klang

Officials say the upgrading of Kuantan Port, which will be completed by mid-2018, is only one part of what is shaping up to be Malaysia's most expensive infrastructure undertaking.
The port, which began operations in 1984, is central to the ECRL, which will depend on Chinese train technology and funding.

The proposed 620km electrified railway line will snake its way from Tumpat, located near Malaysia's north-eastern border with Thailand, down the coast to Kuantan Port, before cutting through the mountainous central region to Port Klang, Malaysia's biggest port.

China has also proposed building a new port in Malacca, also on the west coast, but Malaysian government planners say financing for the project has yet to be finalised

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Malaysia’s China stance a hedging strategy, says analyst

Malaysia is not pivoting away from the US in favour of building ties with China, according to political analyst Yang Razali Kassim.

Malaysia is simply deepening its hedging strategy, he said in an interview with World Politics Review (WPR).

“Kuala Lumpur is certainly forging closer economic, defence and security ties with China, but I don’t think it means forsaking relations with the United States.

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China’s ‘One Belt, One Road’ initiatives in Malaysia

On Jan 14, I attended a conference in Johor Baru organised by the Johor Bahru Chinese Chamber of Commerce and Industry and had the opportunity to interact with several mainland Chinese managers and leaders from the private sector who are active in Malaysia. High on the discussion list was China’s “One Belt, One Road” policy and its implications for Malaysia and Iskandar Malaysia.

The final weeks of 2015 were quite momentous in terms of the Chinese presence in Malaysia. During a state visit in November, Chinese Premier Li Keqiang pledged to buy Malaysian government bonds, which have been hit by foreign selling as crude oil prices have been falling since late 2014 and by the1MDB crisis in 2015. This caused a knee-jerk uplift in the value of the ringgit, as the perception was China would step in to stabilise Malaysia’s financial markets.

It was also the biggest step forward for the financial sector between China and Malaysia since April 2015, when Malaysia became the second country in Asean (after Singapore) to have a renminbi clearing centre.

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China projects in Malaysia to hit Singapore
Most of the Malaysia-China indirect trade (about RM200bil) that goes through S'pore could return to Malaysia

The giant republic's aggressive investments in ports & rail links in Malaysia under its belt-road regional economic expansion programme is going to change the outlook for the island republic.

China's current mega belt-road projects in Malaysia, once completed, will alter trade routes in the region & this may divert hundreds of billions worth of trade from Singapore, according to industry players.

Cargoes & goods within the region heading for China or vice versa could bypass the Port of Singapore, when China-funded ports & East Coast Rail Line (ECRL) in Peninsular Malaysia are completed within 5 to 10 years

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China Wants This Malaysian Port to Rival Singapore (And That’s Not All)
A tourist boat travels along the Malacca River

The Straits of Malacca have been a gateway for China for centuries in its quest for power.

A story blended from Malaysian history and folklore says an emperor sent a princess called Hang Li Po to marry the Sultan of Malacca in the Ming Dynasty, offering a ship filled with gold needles. He also sent a blunt message. “For every gold needle, there is a subject. If you can count the number of needles, you will learn the true extent of my power,” the emperor reportedly said in a letter.

Hundreds of years later, China is again seeking influence in Malaysia as it spreads its economic and military clout through Southeast Asia. It is investing billions in a $7.2 billion redevelopment that will see Malacca, long the haunt of Chinese traders, become a new deep sea port.


Embracing, Leaning & Tilting towards China
FILE - In this Nov. 19, 2015 file photo, Malaysia's Prime Minister Najib Razak, left, talks with China's President Xi Jinping as they arrive for a family photo with other leaders at the Asia-Pacific Economic Cooperation summit in Manila, Philippines.

Following Philippine President Rodrigo Duterte's recent visit to China, Malaysia's prime minister is the latest leader of a nation that claims territory in the South China Sea to travel to Beijing.

Najib Razak arrives in the Chinese capital on Tuesday for a six-day visit to the country whose claims to virtually the entire strategic waterbody overlaps with areas that Malaysia says belong to it.

Malaysia claims a swath of the South China Sea north of Borneo, along with islands and reefs, but has been relatively understated amid feuding among fellow claimants China, Vietnam and the Philippines.

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related:
Could Singapore’s port become irrelevant?
Iskandar Malaysia: Why are the Chinese here?
S'pore-KL High Speed Rail Agreement
Malaysia's "gain" and Singapore's "loss"
Malaysia's ECRL touted as a game changer
Embracing, Leaning & Tilting towards China
Mega reclamation project off Johor
Malaysia files for revision of ICJ’s Pulau Batu Puteh decision