The Star/ANN

Beijing | Tue, November 1, 2016 | 12:18 pm

China will provide 55 billion ringgit (US$13 billion) 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 Liow Tiong Lai.

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

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

This means China will carry out the detailed engineering and design of the ECRL, procure all materials and equipment, and deliver the facility to Malaysia.

“As far as I know, this is the biggest single deal Malaysia will be signing with China,” said Liow, who has worked very hard to obtain China’s investments in ports, aviation and railways since he took over the transport portfolio in June 2014.

On the terms of the soft loans to be given by China’s EXIM Bank, Liow said the rates are very competitive and repayment is over 20 years.

“And in the first seven years Malaysia will not have to pay anything — interest and repayment.

“But for the construction contract to be awarded to government-owned China Construction Communications Company, there are terms that the state has to work with local partners,” he said.

Construction of the five-year project is scheduled to start next year.

The first phase of the 600-km rail line will be from the Klang Valley to Kuantan, second from Kuantan to Kuala Terengganu, and third from Kuala Terengganu to Kota Baru and Tumpat.

More:

http://www.thejakartapost.com/seasia/2016/11/01/china-to-pour-in-billions-for-malaysias-rail-project.html

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IZAKOVIC