Spillover ef­fects will ben­e­fit towns along route, SMEs, say ex­perts

New Straits Times - - News -

KUALA LUMPUR: The spillover ef­fects from the East Coast Rail Line (ECRL) project will, among oth­ers, en­able towns such as Ben­tong and Men­takab, both in Pa­hang, to ex­pand rapidly due to the bustling trad­ing and con­struc­tion ac­tiv­i­ties, economists said.

Small- and medium-scale en­ter­prises, in­clud­ing those in the re­tail busi­ness, would be among the main ben­e­fi­cia­ries from the in­creased con­sump­tion ac­tiv­i­ties in the towns lo­cated along the route.

The project would be un­der­taken in three phases with the first phase from the Klang Val­ley to Kuantan, fol­lowed by Kuantan to Kuala Tereng­ganu, and the fi­nal phase from Kuala Tereng­ganu to Kota Baru and Tumpat.

AmBank group chief econ­o­mist An­thony Dass es­ti­mated that the project would cre­ate around RM50 bil­lion in terms of gross do­mes­tic prod­uct (GDP).

“For ev­ery ring­git spent on cap­i­tal projects like trans­port, it gen­er­ates a re­turn of around five to 20 per cent,” he said.

Dass added that in the process, it would cre­ate more town­ships in the states that would ben­e­fit from it, which meant more busi­ness ac­tiv­i­ties, and trade for Malaysia and the re­gion, as well as im­prove­ments in mo­bil­ity.

De­pend­ing on the speed of im­ple­men­ta­tion

For ev­ery ring­git spent on cap­i­tal projects like trans­port, it gen­er­ates a re­turn of around five to 20 per cent. AN­THONY DASS AmBank group chief econ­o­mist

and roll­out of projects, the ac­tiv­i­ties this year are ex­pected to con­trib­ute at least 0.2 per­cent­age points to the GDP next year.

Ac­cord­ing to the Sta­tis­tics De­part­ment, Ke­lan­tan, Tereng­ganu and Pa­hang recorded a GDP growth of 3.5 per cent, 3.3 per cent and 4.4 per cent re­spec­tively.

“We can ex­pect the first wave of con­tri­bu­tions to come from con­struc­tion and sup­port­ing man­u­fac­tur­ing ac­tiv­i­ties,” Dass said.

“With lower trans­port costs, this would lead to lower cost of do­ing busi­ness, and that means pro­duc­tiv­ity should im­prove with a greater level of ef­fi­ciency. This would im­prove com­pet­i­tive­ness of our prod­ucts and ser­vices and com­mer­cial ac­tiv­i­ties,” he added.

Tourism ac­tiv­i­ties and the flow of for­eign vis­i­tors to the re­gion will also steadily in­crease.

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