East Coast Rail Link (ECRL)

East Coast Rail Link (ECRL)

Project Summary

The East Coast Rail Link (ECRL) is a proposed railway infrastructure project spanning 640km that would connect the East Coast states of Kelantan, Terengganu and Pahang to Negeri Sembilan, Selangor and Federal Territory of Putrajaya. The expected costs of the project are estimated at RM44 billion, reduced from the original project cost of RM65.5 billion.1 The railway would serve to improve connectivity between the Eastern Coast of Peninsular Malaysia to its West Coast states, which are currently not connected via rail lines. The railway will be used for both passenger and freight transportation, cutting passenger travel time from Kota Bharu to Putrajaya by approximately 4-5 hours and providing transport connection between the East Coast of Peninsular Malaysia to its West Coast. The overall alignment of the ECRL rail network aims to provide both improved connectivity as well as to spur growth and development of the industrial, commercial and tourism sectors along the ECRL corridor. A groundbreaking ceremony was held in August 9, 2017 to mark the start of the ECRL construction, and the project is expected for completion by the end of 2026.

Figure 1. Overview of the East Coast Rail Link line
Source: MRL 2020

1 Malaysia Rail Link. “ECRL Key Facts.” Accessed through http://www.mrl.com.my/en/ecrl/overview/.

Project Background

The ECRL line will be a standard gauge double-track that covers a distance of 640km. The total length of the ECRL was reduced from the originally planned 688km to 640km following renegotiation efforts in 2019, along with changed rail alignments to the Section C portion.2 Designed to carry both passenger and freight volumes, the project was designed to establish a rail connection between the more developed western states of Peninsular Malaysia to its relatively less developed east coast, while simultaneously spurring economic growth along the route through its construction activities. The ECRL aims to reduce travel time from the west coast to the east coast of Peninsular Malaysia by about 4-5 hours. Aside from improving domestic connectivity, the line will also provide a land bridge between the South China Sea Port of Kuantan and the Klang Port in the Straits of Malacca, thus eliminating the need for vessels to traverse through the busy Straits of Singapore. The scope of the project includes 20 stations with standard gauge and double tracked railways, 30-40 tunnels that will be built for the project together with viaducts in Terengganu, and a 6-car train set for the electrified modified units (EMU’s). The speed of passenger trains will be 160km/h and freight trains will be 80 km/h.
Before the construction of the ECRL project had started, the Land Public Transport Agency (SPAD) and the East Coast Economic Region Development Council (ECERDC) conducted market interest for a proposed East Coast Rail Link rail network on March 15, 2016.3 The “Request for Information” (RFI) was initiated to gain insight on the views and ideas for the proposed ECRL project, however it remains undisclosed as to who the ECERDC and SPAD consulted during this market insight process nor have the results of the survey been made public.

On October 21, 2016, the Malaysian prime minister Najib Razak announced the approval of the project during his parliamentary speech on the proposed 2017 budget. On November 1, 2016, the Malaysian government signed a “framework finance deal and construction agreement” valued at USD13.1 billion (estimated RM55 billion) with China Construction Communications Company (CCCC) as the “builder” for Phase 1 of the ECRL construction. The construction agreement was later identified as an Engineering, Procurement, Construction and Commissioning (EPCC) contract. Phase 1 of the ECRL stretches from Wakaf Baru in the state of Kelantan to the integrated transportation terminal in Gombak.

In March 2017, SPAD granted the conditional approval for the preferred route alignment of the ECRL and displayed the proposed plan for the ECRL for public inspection for 3 months as required under Section 84 (2) of the Land Public Transport Act 2010. The specific records and documents during this public display have not been archived or made available after the end of the three months, however references to the conduct of the public display exercises are available.

2 Malaysia Rail Link. “ECRL Key Facts.” Accessed through http://www.mrl.com.my/en/ecrl/overview/.

3 Land Public Transport Commission, 2016. “SPAD AND ECERDC CONDUCT JOINT MARKET SENSING EXERCISE FOR EAST COAST RAIL LINE (ECRL) PROJECT.” Available through: https://www.apad.gov.my/sites/default/files/media_release_-_spad_and_ecerdc_conduct_joint_market_sensing_exercise_for_east_coast_rail_line_ecrl_project1.pdf.

Project Structure

The ECRL project is owned wholly by Malaysia Rail Link Sdn. Bhd. (MRL), which is a newly established special purpose vehicle (SPV) created by the Malaysian Ministry of Finance through its corporate body established under the Minister of Finance (Incorporation) Act 1957. As the owner of the project, the MRL has implemented a mixed funding scheme in the form of a public-private partnership. In 2016, the governments of Malaysia and China signed a Framework Financing Agreement and Engineering, Procurement, Construction and Commission (EPCC) contract for the project. This deal had awarded China Communications Construction Company (CCCC) and its local subsidiary, China Communications Construction Company (M) Sdn Bhd (CCCCM), the EPCC works for the project.

In a Supplementary Agreement (SA) to the EPCC signed in 2019, MRL and CCCM have agreed to form a joint venture company (MRL 50%: CCCC 50%) to undertake the operations and maintenance of the ECRL.

In the Framework Financing Agreement signed in 2016, Export-Import Bank of China (EXIM Bank) would provide a 20-year loan that would cover 85% of the total cost at a 3.25% interest rate with an additional seven-year repayment moratorium. The remainder of the cost would be funded locally via the issuance of Islamic sukuk bonds by Malaysian investment banks.

Figure 2. Project ownership structure of East Coast Rail Link

Source: Author’s compilation

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Project Information Score Response Link to Information
Project owner Malaysia Rail Link Sdn Bhd MRL Website: http://www.mrl.com.my/en/ecrl/overview/
Sector, subsector Transport; High Speed Railways MRL Website: http://www.mrl.com.my/en/ecrl/overview/
Project name East Cost Rail Link (ECRL) MRL Website: http://www.mrl.com.my/en/ecrl/overview/
Project Location 640km; running through 20 stations from the east cost Kota Bahru to Port Klang in Selangor, passing through Kelantan, Terengganu, Pahang, Negeri Sembilan, Selangor, Federal Territory of Putrajaya MRL Website: http://www.mrl.com.my/en/ecrl/overview/
Purpose “To provide a much-improved connectivity throughout the East Coast region, as well as connecting it to the West Coast, while at the same time, taking into consideration the potential growth for the industrial, commercial and tourism sectors along the ECRL corridor.” MRL Website: http://www.mrl.com.my/en/ecrl/overview/
Project description After Supplementary Agreement dated 12/4/2019: The ECRL will comprise of 20 stations, including 14 passenger stations, five combined passenger and freight stations, and one freight station. The route will have approximately 40 tunnels from Kota Bharu to Port Klang. The line will also feature multiple viaducts of approximately 100km in length. MRL Website: http://www.mrl.com.my/en/ecrl/overview/
Project Scope (main output) “Key outputs have been disclosed, but full details (type, quantity, unit) unreleased
– 20 stations
– Standard gauge, double-tracking
– 30-40 tunnels
– 6-car train set for the EMUs, no specified number of EMUs
– Viaducts in Terengganu”
Technical specifications in MRL’s ECRL FAQ: http://www.mrl.com.my/en/faq/
Environmental impact Sinar Project: https://govdocs.sinarproject.org/documents/ministry-of-natural-resources-and-environment/eia-reports/362980465-ecrl-volume-1-executive-summary.pdf/view
Land and settlement impact Sinar Project: https://govdocs.sinarproject.org/documents/ministry-of-natural-resources-and-environment/eia-reports/362980465-ecrl-volume-1-executive-summary.pdf/view
Contact details “Malaysia Rail Link Sdn Bhd
Level 15, Menara 1 Dutamas, Solaris Dutamas,
No. 1, Jalan Dutamas 1, 50480 Kuala LumpurWebsite: http://www.mrl.com.my
General Line: +603 6411 5800 (9am – 5pm)
Fax: +603 6411 5822
Email: feedback@mrl.com.my”
MRL Website: http://www.mrl.com.my/en/contact-us/
Funding sources Original agreement was: 85% financed through 20-year EXIM Bank loan at 3.25% interest with 7-year moratorium. The residual 15% is government funded through issuance of Sukuk bonds. However, the loan with EXIM bank has been renegotiated during 2019 but the financial/contract details of which have not been disclosed (as at 30/6/2020). “With the improved ECRL at RM44 billion, the loan amount from China EXIM bank will be reduced substantially. The reduced amount is still being negotiated with China-EXIM Bank and we envisage that this will result in lessening the financial burden of the Government in terms of the principal repayment amount, total interest costs and other fees.” PM Press Statement (15/4/2019): https://www.pmo.gov.my/wp-content/uploads/2019/04/Press-Statement-by-PM-on-ECRL_15April2019.pdf
Project Budget New project cost of RM44,000,000,000 – Full cost details unreleased MRL’s ECRL FAQ: http://www.mrl.com.my/en/faq/
Project budget approval date 12/4/2019. Supplementary agreement (SA) to the EPCC contract was signed on 12/4/2019, stating the project cost at RM44b. The Contract was signed between MRLSB and CCCC, with negotiations led by PM’s Special Envoy Daim Zainuddin. PM Press Statement (12/4/2019): https://www.pmo.gov.my/wp-content/uploads/2019/04/PRESS-RELEASE-ECRL-12-APRIL-2019.pdf
Project status (current) Live, construction stage May 14 – ECRL receives approval from APAD for construction to start: https://www.thestar.com.my/business/business-news/2020/05/19/ecrl-gets-approval
Completion cost (projected) New project cost of RM44,000,000,000 – Full cost details unreleased MRL’s ECRL FAQ: http://www.mrl.com.my/en/faq/
Completion date (projected) 31 December, 2026 PM Press Statement (15/4/2019): https://www.pmo.gov.my/wp-content/uploads/2019/04/Press-Statement-by-PM-on-ECRL_15April2019.pdf
Scope at completion Key outputs have been disclosed, but full details unreleased:
– Standard gauge and souble tracking
– 640km inclusive of spur lines
– 20 stations, passing through 5 states
– Link between Kuantan Port and Port Klang
– 3 interchange stations – Putrajaya Sentral, Bangi/Kajang, Mentakab
PM Press Statement (15/4/2019): https://www.pmo.gov.my/wp-content/uploads/2019/04/Press-Statement-by-PM-on-ECRL_15April2019.pdf
Reasons for project changes The PH Government’s main objection to the original East Coast Rail Link (ECRL) project was premised on the way and speed at which the original contract was negotiated and signed in 2016. It was an unjustified, hefty lump sum price which lacked clarity in terms of technical specifications, price and, by extension, economic justification. PM Press Statement (15/4/2019): https://www.pmo.gov.my/wp-content/uploads/2019/04/Press-Statement-by-PM-on-ECRL_15April2019.pdf
Reference to audit and evaluation reports Not available
Procuring entity EPCC: China Communications Construction Co Ltd; China Communications Construction Company (M) Sdn BhdStudy Consultant: HSS Engineers Berhad
Project Owner: Malaysia Rail Link Sdn Bhd
Project Manager: AECOM; HSS Integrated Sdn Bhd
Planning Authority: ECERD; SPAD; MOT
Design Consultant: HSS Integrated Sdn Bhd
China Communication Construction Co Ltd and China Communication Construction Company (M) Sdn Bhd
Procuring entity contact details Block A5, Level 13A, Menara 1 Dutamas,
Solaris Dutamas, No. 1, Jalan Dutamas 1,
50480 Kuala Lumpur, Malaysia.Tel: +603-62063965
Email: enquiry@cccecrl.com
CCC-ECRL Website: https://www.cccecrl.com/
Procurement process Contract to CCCC was done through direct award
CCCC’s procurement of materials and equipment (40% to locals) are done via competitive bidding with a shortlist of suppliers selected after pre-qualification phase
CCC-ECRL Website: https://www.cccecrl.com/local-participation/
CCC-ECRL’s ECRL Materials and Equipment Purchasing System: http://me.cccecrl.com/
Contract type Engineering, Procurement, Construction, Commissioning (EPCC) MRL’s ECRL FAQ: http://www.mrl.com.my/en/faq/
Contract status (current) Active PM Press Statement (15/4/2019): https://www.pmo.gov.my/wp-content/uploads/2019/04/Press-Statement-by-PM-on-ECRL_15April2019.pdf
Number of firms tendering Not available The Star, 2019: https://www.thestar.com.my/business/business-news/2017/10/25/some-1000-subcontractors-vie-for-rm55bil-ecrl-work-packages/
The Straits Times, 2019: https://www.nst.com.my/business/2019/08/509407/ecrl-tenders-pre-qualified-contractors-start-q4-2019
CCC-ECRL’s ECRL Materials and Equipment Purchasing System: http://me.cccecrl.com/opms/en.shtml?id=B9/z1llZU6nydPmyGG5Q+b6uDA396+BL+28goW7OZhQzC7zrPvxGmau8QwWLIAdE
Cost estimate Not available
Contract administration entity Not available
Contract title Not available
Contract firm(s) Not available
Contract price Not available
Contract scope of work Not available
Contract start date and duration Not available
Variation to contract price Difference: RM21.5 billion
Original EPCC contract: RM65.5 billion
SA (12/4/2019): RM44 billion
PM Press Statement (15/4/2019): https://www.pmo.gov.my/wp-content/uploads/2019/04/Press-Statement-by-PM-on-ECRL_15April2019.pdf
Escalation of contract price Not available
Variation to contract duration Exact start date of contract unknown, but construction completion extended by 30 months
Original completion date: 30/6/2024
New completion date (SA 12/4/2019): 31/12/2026
PM Press Statement (15/4/2019): https://www.pmo.gov.my/wp-content/uploads/2019/04/Press-Statement-by-PM-on-ECRL_15April2019.pdf
Variation to contract scope Changes:
– The ECRL rail project was originally planned to be developed in two phases, with phase one covering 600km of track and phase two with an 88km stretch. It will now be built in a single phase, with the whole alignment expected to be completed December 2026.
– Some modifications have been made to the alignment due to cultural, heritage, and environmental concerns. The realigned stretch will run from Mentakab to Port Klang via Negeri Sembilan to avoid traverse through the Klang Gate Quartz Ridge. The new alignment through N. Sembilan was also due to the lower cost of land acquisition.
– The new alignment also resulted in a significant reduction in construction costs from MYR65.5bn ($15.8bn) to MYR44bn ($10bn), based on a comprehensive value engineering exercise.
MRL’s ECRL FAQ: http://www.mrl.com.my/en/faq/
Reasons for price changes The improved ECRL is in line with PH Government’s manifesto to review and revisit all mega projects signed by the previous administration. The conclusion of the negotiations, which began in July 2018, has resulted in substantial savings for the country, which was the ultimate aim of the PH administration when it initiated the negotiation process with China. PM Press Statement (15/4/2019): https://www.pmo.gov.my/wp-content/uploads/2019/04/Press-Statement-by-PM-on-ECRL_15April2019.pdf
Reasons for scope & duration changes Primary change: total length reduction from 688km to 640km and new rail alignments
– New alignment to avoid Klang Gate Quarts Ridge
– No more Southern Extension (Gombak North-Serendah-Port Klang) as new alignment also runs to Port Klang through Bangi-Putrajaya-Port Klang
– No more North Extension (Kota Bharu-Wakaf Bharu-Pengkalan Kubor) as it does not add substantial value to the transportation network
MRL’s ECRL FAQ: http://www.mrl.com.my/en/faq/

East Coast Railway Link (ECRL)