Prof Yeah Kim Leng

KUALA LUMPUR: MMC Corp Bhd and Gamuda Bhd (MMC-Gamuda joint venture) are expected to be the main beneficiaries among local firms of the East Coast Rail Line (ECRL) project, said a fund manager.

VCB Capital executive director and chief executive officer Mohd Amir Mokhtar said unlike other infrastructure development companies in Malaysia, MMC-Gamuda has the experience to undertake a railway job, which it gained from past projects such as the Ipoh-Padang Besar electrified double track project.

“It has been among the best in terms of helping to develop railway infrastructure in Malaysia. The joint venture has more than enough experience and capital to help build the ECRL,” he told Business Times.

MMC-Gamuda currently has a RM15.47 billion tunnelling contract for the Sungai Buloh-Serdang-Putrajaya mass rapid transit project.

The ERCL, which is estimated to cost RM55 billion, is a 620km project in the east coast of Peninsular Malaysia and will be Malaysia’s biggest rail development project.

Amir expect companies such as IJM Corp Bhd and WCT Bhd to also benefit from the project via partnership with MMC-Gamuda.

Other firms with railway-related experience that would also benefit are Ahmad Zaki Resources Bhd, Sunway Bhd, UEM Group, Malaysian Resources Corp Bhd and YTL Corp Bhd.

Treasury secretary-general Dr Irwan Serigar Abdullah said on Monday in Beijing the construction of the project is expected to start next year and slated for completion by 2022.

China Communications Construction Co will build the ECRL while financing will be provided by Export-Import Bank of China (Exim), he said.

Director of Economic Studies Programme at Jeffrey Cheah Institute on Southeast Asia, Prof Yeah Kim Leng, said news of the ECRL will not only be a boon for the construction sector but also for trade in Malaysia.

Yeah said the ECRL will boost connectivity to Southeast Asian countries and Eurasia (Asia and Europe) via China’s “Pan-Asia railway network”.

He said the ECRL’s participation in the Pan-Asia railway network is expected to greatly enhance two-way trade for Malaysia given the growing importance of rail in moving freight and people.

“The comparative advantage of rail connectivity lies in the movement of bulky goods due to lower cost and larger volume compared to other transport modes like road and air.

“There will be greater spillovers from the rail project if we can tap this regional connectivity to enhance cross-border trade and investment,” said Yeah.

The movement of goods includes transporting natural resources and large items, he said.

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