Will the ECRL really threaten Singapore?

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PETALING JAYA: The East Coast Rail Link (ECRL) can threaten Singapore’s shipping business, but only if ports on the western and eastern sides of Peninsular Malaysia operate at world class efficiency, says an official of the Institute for Democracy and Economic Affairs (Ideas).

Speaking to FMT, Ideas external relations manager Azrul Mohd Khalib noted that the China-financed ECRL would create a 250km land bridge which could undercut the Malacca Straits trade route by bypassing Singapore.

He was commenting on a recent article in the Singapore Straits Times which said the ECRL could pose a threat to Singapore.

“It could shorten transit for shipments of oil and products to East Asian countries like Japan and China by hundreds of kilometres, saving much precious time,” Azrul said.

“This is important as 80% of China’s oil from Africa and the Middle East goes through the straits.”

However, from a trade perspective, Azrul said the extent of the benefits of the ECRL route compared to going through Singapore was still questionable.

With the ECRL, he said, goods would need to be offloaded at Port Klang, loaded onto freight railcars, travel to the port in Kuantan, off loaded from the freight cars, and loaded onto the ships in the latter port.

“For each step involved in the process, there will be costs incurred. How much of this will represent savings as compared to going through Singapore?”

Singapore, he said, had decades of proven experience in managing and delivering efficient and reliable shipping operations as well as acting as the busiest container transshipment hub in the world.

Azrul added that the success of the ECRL would depend on the ability of Port Klang and Kuantan Port to perform at the level of world-class ports. They must be able to handle the expected increase in cargo volumes, he said.

“Only then can they expect to present a formidable challenge to Singapore. It goes beyond just building the hardware.”

Azrul said he viewed the ECRL as an expression of China’s displeasure with Singapore for improving its ties and security cooperation with the United States, particularly with regard to the disputed South China Sea issues.

Last October, it was reported that China would build and fund the ECRL at an estimated cost of RM55 billion. Construction will begin next year and is expected to be completed in 2022.