KUALA LUMPUR: Development plans are being finalised for each major town along the East Coast Rail Link (ECRL), Transport Minister Liow Tiong Lai said.
This, he said, would accelerate economic and social activity especially in Bentong, Mentakab, Kuantan, Kertih, Kuala Terengganu and Kota Bharu.
He added that the benefits of such a mega project could only be felt once the project was fully operational.
Writing in The Jakarta Globe, Liow said the ECRL was the “tipping point” in the physical connectivity between the east coast states and the developed west coast.
The ECRL, a 688km railway connecting the west coast to the east coast of Peninsular Malaysia, is projected to cost RM55 billion and create more than 80,000 jobs.
This is expected to have a multiplier effect on local economic growth and help achieve equitable growth and development between the east and west coasts.
“Criticisms levelled against the ECRL have blindsided the fact that such infrastructure projects propel the economy, shape how Malaysians travel, communicate, and make a living – and promote national competitiveness.
“These social and economic benefits can definitely be reaped within a mid-to-long term.”
Liow noted that there were dissenting voices, too, when the North-South Expressway was launched in 1981.
“Small towns and cities dotted along this stretch have since flourished, and continue to prosper.
“The same can be achieved through the connectivity provided by the ECRL.
“It must be considered holistically and in tandem with the national development agenda.”
Liow said with the announcement of China’s One Belt One Road expansion in Malaysia, the Malaysian government secured a soft loan from Exim Bank of China “on attractive terms, including a currency swap mechanism to contain exchange rate risks”.
“Debates about the project’s feasibility often question the financial viability, citing its potential risks in generating sufficient revenue to service the loan. The argument is valid.
“However, such large-scale infrastructure projects must be evaluated beyond profitability – not in the early years anyway.”
He then cited the development of each major town from Kuala Lumpur to Kota Bharu which would benefit from the ECRL.
“The government is cognisant of the investment required and has taken measures to mitigate the negative impact on the government’s fiscal position.
“Mega infrastructure projects like ECRL are normally financed through government guaranteed debts rather than through direct government expenditure.
“Government guaranteed debts have clear advantages over direct expenditure since the latter requires substantial upfront outlays, paralysing the government’s efforts to deliver other beneficial programmes to the rakyat.
“Due to more stringent evaluation and robust risk assessment, Malaysia’s government-guaranteed debt growth has been reduced from an average of 14% in 2012-2014 to just 4.3% in 2015-2016,” Liow said.
As Malaysia transitioned into a high-income nation, he said, “it is only reasonable to expect greater inter-city and inter-state connectivity to ensure more equitable growth across the entire nation”.