Malaysia has resumed East Coast Rail Link (ECRL) project works, which were suspended for nearly a year due to high construction costs.

The relaunch of construction works for the rail link follows the signing of a revised agreement with Chinese contractors in April.

The revised agreement significantly reduces the scale of the project and increases local participation, as well as re-aligning some sections of the route.

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

A part of China’s Belt and Road initiative, the 640km-long ECRL will connect Peninsular Malaysia’s eastern coast to states near Kuala Lumpur. The project is expected to be completed in 2026.

At the re-launch of the project, Malaysian Transport Minister Anthony Loke said: “The ECRL will bring economic benefits to the country, not just in construction, but that it would also connect all the railway tracks to the ports.

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By GlobalData

“Hence the shipping and logistics industry would certainly enjoy more encouraging industry growth.”

In July last year, Malaysia instructed China Communications Construction (CCCC) to suspend works.

Subsequently, both countries carried out months of negotiations to revise the scope of the project and reduce the financial burden on Malaysia.

Malaysia is expected to enter a supplementary agreement with Export-Import Bank of China to reduce interest costs of the project.

The Chinese bank will finance 85% of the total costs.

Last year, Malaysia also signed a revised agreement to postpone the high-speed rail project between the capital of Kuala Lumpur and Singapore.