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