Malaysia offers new strategic locations for foreign and domestic investors along the ECRL corridor

MIDA Insights - Events

Malaysia's earliest railway system was established during the British colonial era when the Federated Malay States Railway and the Malaysian Railway Administration operated in 1885. The first railway line connected Taiping to Port Weld (Kuala Sepetang) to transport tin cargo from the mines in the vicinity of Taiping, Larut and Matang.

The railway system at that time was mostly decentralised and concentrated on rail lines within state boundaries in locations such as Perak, Selangor, Johor (Muar), Negeri Sembilan (Sungai Ujong) and Sabah. Currently, Sabah has the only rail transport system operating on the island of Borneo.

Originating in 1896, the rail network in Sabah was known as the North Borneo Railway and was initially intended primarily for the transport of tobacco cargo from the interior to the coast for export.

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Historically, the main driver for constructing rail lines was to transport cargo and freight from the source locations to the ports along the coast. In recent years, the Malaysian rail network has vastly expanded to include Keretapi Tanah Melayu Berhad (KTMB), Light Rail Transit (LRT), Express Rail Link – KL Sentral to KLIA (ERL), KL Monorail and Mass Rapid Transit (MRT). The rail transportation in Malaysia has now developed into a system using modern infrastructure improving efficiency and effectiveness.

Recently, the Government's decision to reactivate the East Coast Railway Link (ECRL) project, entails a comprehensive value engineered plan to construct and operate a 640km line extending over five states (Kelantan, Terengganu, Pahang, Negeri Sembilan and Selangor) as well as the Federal Territory of Putrajaya. The ECRL route will span from Kota Bharu (Kelantan) through to Port Klang (Selangor) with 20 stations planned to transport passengers and/or freight.

There will be 14 passenger stations, five combined passenger and freight stations as well as one purpose-built freight station. Out of the total number of stations, three have been identified as interchange stations namely;

  • Mentakab (Pahang) with KTMB,
  • Bangi/Kajang (Selangor) with KTMB, and
  • Putrajaya Sentral (Federal Territory of Putrajaya) with ERL/MRT.

This electrified standard gauge, rail network is double tracked and will cruise along at 160km/h to enable a passenger train journey time of four hours from Kota Bharu to Putrajaya. The freight train is planned to run together at 80km/h transporting cargo, and this is forecasted to contribute a significant portion to the economic value of the ECRL. Increased connectivity between rural and urban areas encompassing transportation and logistics within East-West Peninsular Malaysia will be faster and easier upon project completion by December 2026.

With the potential of enormous investment and economic opportunities along the route, a dedicated team within MIDA has been established to facilitate, evaluate and review the implementation of the Economic Accelerator Projects (EAP) along the ECRL corridor.

This follows the signing of the Memorandum of Understanding (MoU) between the Malaysian Investment Development Authority (MIDA) and China Communications Construction Company Ltd. (CCCC) on April 25th 2019 in Beijing, witnessed by YAB Tun Dr. Mahathir Mohamed, Prime Minister of Malaysia and His Excellency Li Keqiang, Premier of the State Council of the People's Republic of China.

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Moving forward, the team will engage and strategise various action plans covering promotional activities and engagements with relevant stakeholders, including domestic industries.

These catalytic projects will create a broad spectrum of business and job opportunities, including the development of industrial parks, logistics hub and transit-oriented development along the ECRL corridor.

The ECRL project, which will form the East-West rail transport network is designed to stimulate the commercial, logistic, import and export, as well as tourism development activities along the proposed alignment. With the inflows of Foreign Direct Investment (FDI) and Domestic Investment (DI) and potential growth for industrial, commercial and tourism sectors, the railway will contribute towards bridging the development gap between the east and west coasts of Peninsular Malaysia.

MIDA, together with CCCC, will promote the EAP to maximise its success potential and invite local and international investors to invest in the projects. Both parties will also undertake cooperation and capacity building activities to encourage the industrial and business communities to organise or participate in dialogues, workshops, seminars and conferences; technical assistance to promote and facilitate capacity building and training; and the sharing of best practices.

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Last Updated : Friday 25th September 2020