China will build and provide financing for Malaysia’s East Coast Rail Link (ECRL), a RM55 billion railway project spanning four states, said a senior Malaysian official on Monday (31 October), 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 (CCCC).
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 14 business 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 four littoral mission ships (LMS) from China. The purchase will be the first significant defence deal between the two countries. It is the first time Malaysia is procuring a defence asset from China.
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 New Straits Times 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. His Alibaba Group raised US$25 billion in Sept 2014, in what is billed as the world’s largest-ever initial public offering (IPO).
Najib had witnessed the exchange of 14 business arrangements with proposed investments estimated at RM143.64 billion held at the Malaysia-China Business Forum in the Chinese capital.
The agreements and memoranda of understanding comprise:
- Engineering, Procurement, Construction and Commissioning Agreement between Malaysia Rail Link Sdn Bhd, China Communications Construction Company Limited (CCCC) and China Communications Construction Company (M) Sdn Bhd (CCCCM).
- Memorandum of Agreement for Investment, Development and Construction of Malacca Gateway Project (KAJ Development and Power China).
- Heads of Agreement between Bandar Malaysia Sdn Bhd and Greenland Holdings Group Overseas Investment Company Ltd in respect of the Proposed Purchase of Land and Development thereon in Bandar Malaysia.
- Heads of Agreement between Selat PD Sdn Bhd and CCCC Dredging (Group) Co Ltd.
- Framework Cooperation Agreement between the State Government of Sarawak, Hebei Xinwuan Steel Group and MCC Overseas Limited on the Proposed Development of Steel Plant in Sarawak.
- Memorandum of Agreement between KAJ Development Sdn Bhd, Power China, Shenzhen Yantian Port and Rizhao Port for partnership collaboration on Malacca Gateway Port.
- Heads of Agreement for the Bandar Malaysia Financial Scheme between IWH CREC Sdn Bhd and Industrial and Commercial Bank of China (ICBC).
- Memorandum of Understanding between East Coast Economic Region Development Council (ECERDC) and Wuxi Suntech Power Co Ltd for Production of Crystalline Silicon Solar Cells and Module within the Malaysia-China Kuantan Industrial Park (MCKIP).
- Memorandum of Agreement between BHS Industries Bhd and China Nuclear Huaxing Construction Co Ltd for Green Technology Park in Pekan, Pahang, Malaysia.
- China Construction Bank (Malaysia) Bhd was granted a banking licence by the Minister of Finance under the Financial Services Act 2013. With an initial paid-up capital of US$200 million, China Construction Bank will be able to provide infrastructure financing to support Malaysia’s infrastructure development.
- Memorandum of Understanding between Yanming Resources Sdn Bhd and Fuzhou Xin Zibu Culture Communication Co Ltd for the Growth and Development of Bird’s Nest Market in China.
- Memorandum of Understanding between Malaysia External Trade Development Corp (Matrade) and Alibaba.com.
- Research and Development Collaboration Agreement between Royal Bird’s Nest, Walet Company-International Private Limited Company and Peking University on Standardisation of Edible Bird’s Nest Extract and Medical Properties for Pharmaceutical Drug Discovery.
- Memorandum of Understanding between Aladdin Group Sdn Bhd and Suzhou Lian Cheng Yihao Information Technology Co Ltd.
“My official visit to China this time has brought very encouraging results and this achievement brings the bilateral relations between Malaysia and China to a higher level, a new high,” he told Malaysian journalists.
On Tuesday, Najib announced that the construction of the four LMS bought from China will be a joint venture between Boustead Naval Shipyard Sdn Bhd and China Shipbuilding and Offshore International Co Ltd.
Defence Minister Datuk Seri Hishammuddin Tun Hussein said the construction would be monitored by his ministry and China’s State Administration for Science, Technology and Industry for National Defence.
Source : http://www.ptlm.com.my/