KUALA LUMPUR: The RM55 billion East Coast Rail Link (ECRL) project is expected to cover its operating cost through passenger fares, freight charges and non-fare revenues.
Additionally, the transit-oriented development (TOD) will also assist in bearing the cost, said the Finance Ministry in a Parliamentary written reply to Ngeh Koo Ham (DAP-Beruas).
TOD is a type of urban development that maximizes the amount of residential, business and leisure space within walking distance of public transport.
Ngeh had raised concern that the ECRL project will become an abandoned project and will burden the future generation.
The Finance Ministry also stated that ECRL will pay back the loan for the project through advertisement, retail and communication revenues.
It noted that 85 per cent of the ECRL project will be funded by the Chinese Exim Bank soft loan, with 3.25 per cent interest.
The ministry described it as "highly attractive" compared with other loans to developing countries in financing infrastructure projects.
As for the balance of 15 per cent, it will be financed with sukuk programmes through local banks.
The ECRL, as part of the “infra-rakyat” projects together with the Mass Rapid Transit, the Kuala Lumpur-Singapore High-Speed Rail, and the Pan-Borneo Highway, which provides modern, safe, efficient and reliable public transport, is touted to play a big role in propelling the Malaysian economy into the top 20 nations by 2050.
It will cut travel time between the east and west coast from 12 hours average, to a mere four hours.
According to Malaysia Rail Link Sdn Bhd, the project is expected to generate around RM50.1 billion worth of socio-economic benefits from this project.
The east coast states of Terengganu, Kelantan and Pahang are expected to generate 1.5 per cent growth over the next 50 years.
Reports By ARFA YUNUS, BEATRICE NITA JAY and FERNANDO FONG