The £2 billion Gemas-Johor Bahru double-tracking rail project
There are few projects that capture the scale and ambition of the Belt and Road more than the 6,617-kilometre-long rail track being built to link Kunming, in China’s Yunnan province, with Singapore. The railway crosses eight countries, connecting 1.65 billion people in the process. It also demonstrates the long time horizon needed to understand the ties along the Silk Road.
The Silk Road goes back more than 2,000 years, to early trading between the Han and central Asian peoples. Although China’s president Xi Jinping gets a lot of credit for resuscitating the notion of the Silk Road in a 2013 speech, in truth the importance of trade and infrastructure links has never gone away. Most bankers privately admit the Belt and Road as a policy initiative is vague, but as a movement of capital in the grand sweep of history, it is undeniable.
The Kunming-Singapore railway project’s life can be measured in decades rather than millennia, but it was well under way before Xi Jinping’s announcement put the expression Belt and Road on everyone’s lips.
The scheme started as an agreement between members of the Association of Southeast Asian Nations (Asean), although the idea had been knocking around long before. But once Chinese capital and knowledge become involved, it moved into a higher gear.
Most impressive
The Kunming-Singapore railway, also known as the Pan-Asian Railway, has sprouted numerous construction projects throughout southeast Asia. The Kunming-Vientiane portion, funded in large part by Chinese capital, picks up our award for best project in southeast Asia.
But the $2 billion double-tracking project in Malaysia, which is part of the Kunming-Singapore rail link, stood out as the most impressive project overall, showing the scale of ambition of the Belt and Road Initiative and its ability to bring together cooperation, funding and business from a range of Chinese and local corporations and financial institutions.
China Railway Construction Corporation, China Railway Engineering Corporation and China Communications Construction Corporation won the mandate to lay 197 kilometres of tracks connecting Gemas, a town in the Malaysian state of Negeri Sembilan, and Johor Bahru, at the southern tip of the Malaysian peninsula. The project, due to be completed by the end of 2020, will be a boon for local contractors. Gamuda, IJM, George Kent and Vivocom are among the Malaysian companies that could make a handsome profit as sub-contractors, according to DBS.
Perhaps more importantly, Chinese assistance has pushed Malaysia over a symbolic hurdle when it comes to infrastructure. The country has already pulled off the construction of a double-track railway from Padang Besar, in the northern tip of the country, all the way down to Gemas, some 600 kilometres away. At that point, Malaysia’s commitment to develop its portion of the Singapore-Kunming Rail Link will be complete, according to Malaysia’s ministry of transport.
The deal is a win-win for China and Malaysia, as well as for Chinese companies and their Malaysian counterparts.