East Coast Rail Link project in Malaysia back on track. Credit: Lei Han.

Malaysia and China have signed a revised agreement to resume construction of the suspended East Coast Rail Link (ECRL).

The new agreement, which reduces the scope and cost of the original project, was signed following months of negotiations between the two countries.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

According to a statement from the Malaysian Prime Minister’s office, the ECRL project will now be built with an investment of MYR44bn ($10.7bn), nearly two-thirds of the original cost.

“This reduction will surely benefit Malaysia and lighten the burden on the country’s financial position,” the statement added.

Last year, Malaysia halted construction of the rail link owing to its high costs and said it would re-negotiate with the Chinese authorities to reduce the scale of the project.

“The ECRL project will now be built with an investment of MYR44bn ($10.7bn), nearly two-thirds of the original cost.”

Malaysian official Daim Zainuddin, who negotiated with China, said that the original 688km project will be reduced by 40km to 648km.

Additionally, the cost of building each kilometre of the line will be reduced significantly from MYR98m ($23.82m) to MYR68m ($16.53m).

Further revised details on financing and interest payments will be released this week.

As part of China’s Belt and Road initiative, the East Coast Rail Link project will connect Port Klang on the Straits of Malacca to Pengkalan Kubor in north-east peninsular Malaysia.

In January, Malaysia terminated the original contractor agreement with China Communications Construction Company.

The current Malaysian Government has been reviewing all major national infrastructure projects, which may increase the national debt.

Last year, it suspended the construction of the high-speed rail project between its capital Kuala Lumpur and Singapore.