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China to build and finance M’sia’s S$18.3b East Coast Rail Link project

BEIJING — China will build and provide financing for Malaysia’s East Coast Rail Link (ECRL), a RM55 billion (S$18.3 billion) rail project spanning four states, said a senior Malaysian official on Monday (Oct 31), as Prime Minister Najib Razak arrived in Beijing for a week-long visit.

Malaysian PM Najib Razak (left) will meet Chinese President Xi Jinping to discuss bilateral cooperation. China has been Malaysia’s largest trading partner since 2009. Photo: Reuters

Malaysian PM Najib Razak (left) will meet Chinese President Xi Jinping to discuss bilateral cooperation. China has been Malaysia’s largest trading partner since 2009. Photo: Reuters

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BEIJING — China will build and provide financing for Malaysia’s East Coast Rail Link (ECRL), a RM55 billion (S$18.3 billion) rail project spanning four states, said a senior Malaysian official on Monday (Oct 31), as Prime Minister Najib Razak arrived in Beijing for a week-long visit.

Finance ministry secretary-general Dr Mohd Irwan Serigar Abdullah told the Malaysian media that the engineering, procurement, construction and commissioning contract has been awarded to China Communication Construction Company.

The financing agreement will be handled by the Export-Import Bank of China, he said upon arrival in Beijing as part of the Malaysian delegation accompanying Mr Najib.

Both agreements will be among the more than 10 agreements to be signed between the two countries during Mr Najib’s six-day visit to China to strengthen bilateral ties.

“Looking forward to a fruitful visit to further strengthen Malaysia-China cooperation. Malaysia has enjoyed a strong bond with China and we are committed to further strengthening our ties and friendship,” Mr Najib posted on his Facebook page on Monday upon arriving in the Chinese capital.

Mr Najib will meet with his counterpart Li Keqiang on Tuesday after attending an official welcoming ceremony at the Great Hall of the People.

Both leaders will witness the signing of memorandums of understanding covering the areas of defence, economy, agriculture, education, finance and construction.

Last week, news broke that among the deals to be signed is one which will see Malaysia buy littoral mission ships from China. If sealed, the purchase will be the first significant defence deal between the two countries.

The 620-km ECRL project will link the port town of Port Klang in Selangor to the east coast state of Kelantan. It will

connect smaller towns such as Mentakab in Pahang, Dungun (Terengganu) and Tumpat in Kelantan and aimed at unlocking the economic potential of these towns as well as uplifting the livelihood of the people who live along the rail line.

“The Chinese investment in Malaysia will open up smaller towns like Mentakab, Dungun, and going up to Tumpat,” the New Straits Times (NST) quoted Dr Mohd Irwan as saying.

The rail project is part of the East Coast Economic Region (ECER) corridor launched in 2007 to develop Malaysia’s east coast. Construction is expected to start early next year.

Dr Mohd Irwan said the decision to seek financing from China was due to attractive terms offered.

“If you borrow in the international market you will not get the low interest rate that we will get. We haven’t finalised (the details) but we will get very competitive (rate) and the repayment period we expect to be 20 years,” he was further quoted as saying.

Mr Najib’s trip to China — his third since 2009 — will also see him meeting Internet giant Alibaba Group founder Jack Ma, as well as having a discussion with 30 top Chinese businessmen.

The premier is expected to discuss with Mr Ma Malaysia’s plans to develop its digital economy — identified in the recent 2017 Budget as one of its key pillars of growth — and Mr Mohd Irwan said on Monday the Chinese billionaire may be offered an advisory post to help the South-east Asian country to achieve its objective.

“We will discuss with him about bringing his ideas, and there’s also talk about appointing him to the digital councils in Malaysia, to get his ideas,” the NST quoted Mr Mohd Irwan as saying.

He said as digital economy will be an “in thing” for the next two decades, any cooperation with China will benefit Malaysia as part of its plan to accelerate economic growth and human capital development.

According to the 2015 Forbes Rich List, Mr Ma 51, has a net worth of US$21.8 billion (S$30.4 billion). His Alibaba Group raised US$25 billion in Sept 2014, in what is billed as the world’s largest-ever initial public offering (IPO). AGENCIES

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