Pic By ISMAIL CHE RUS
THE RM55 billion East Coast Rail Link (ECRL) project is expected to be break even financially in 2032, or eight years after its proposed commencement.
Deputy Finance Minister Datuk Othman Aziz (picture) said the mega rail project is also expected to be financially independent by 2032, after its completion by the end of the second quarter of 2024 (2Q24).
“The ECRL is expected to be completed by the end of 2Q24. The loan will be repaid in 20 years, after the completion,” he told the Dewan Rakyat yesterday.
Othman was responding to Ranau MP Datuk Dr Ewon Ebin, who queried about the latest development of the ECRL and the revenue projection of the rail project.
Othman said the ECRL’s concessionaire, Malaysia Rail Link Sdn Bhd (MRL), will collect revenue from passengers fees, cargo fees and non-fare revenue, which include advertisements and retail.
He said the ECRL is expected to generate a revenue of RM2.9 billion in 2024 alone.
“The government estimates that from 2032, the concessionaire can break even from the operational aspect and can be independent without any fund injection from the government,” he added.
Othman also said the ECRL is not solely dependent on passengers to raise revenue, as 80% of the operations would be transporting cargo from Kuantan to Port Klang.
“If we want to depend entirely on passengers, it will not be viable. The cost of every kilometre is 20 sen and a significant majority of the cost will be taken by the cargo operations,” he said.
The ECRL project — a rail link connecting the east coast of Peninsular Malaysia to the west coast — was formalised by the government last year.
It is owned and implemented by MRL, a firm owned by the Minister of Finance Inc.
Beijing-based China Communications Construction Co Ltd was awarded the engineering, procurement, construction and commissioning contract for the rail project, in which 85% of the cost would be funded by Chinese financial institutions.
The first phase of the ECRL involves 600.3km of rail road connecting Gombak in Kuala Lumpur and Tumpat, Kelantan, with an estimated cost of RM46 billion.
The second phase development linking Gombak and Port Klang in an 88km rail project was inked on May 13 with an estimated cost of RM9 billion.