East coast states have much to gain upon the implementation of the East Coast Railway Link (ECRL) project with household incomes, tourism and transport expected to improve, a report has stated.

According to The Edge Markets, the report by MIDF Research said that the controversial rail project could improve household income in Terengganu, Kelantan and Pahang.

The figures for the three states stood at RM3,079, RM4,694 and RM3,979 at 2016 respectively as of 2016. The median monthly household income for Malaysia stood at RM5,228 as of the same year.

“ECRL, with its 30 percent allocation for passengers, could form a new latent passenger demand as travelling hours are reduced on top of declining cost.

“MIDF Research said ‘slow travellers’ could afford to take the train to shop for speciality products in the region, therefore reinforcing the tourism industry there.

“Meanwhile, as 70 percent of the transportation is mainly for freight, improvement in industrial and external trade activities will eventually generate jobs, uplift household income and reduce the inequality gap,” The Edge Markets report stated.

MIDF Research further predicted that other sectors, including real estate and petrochemical sectors, also stood to benefit from this project.

Development in the routes too, could bolster job opportunities in the region and help the unemployment crises in the three states said MIDF Research adding,“we opine the investment in railway (ECRL) will spur economic growth and development in Malaysia amid the strong output multiplier effects.

The research house, however, warned of “undesirable side effects, such as land exploitation, overproduction and existing boom towns which could go bust,” The Edge Markets stated.

The Malaysian government had this week confirmed it had granted the Chinese firm China Communications Construction Company (CCCC) relief from paying GST in its procurement of the ECRL so as to reduce implementation costs.

This came in the wake of documents released by Amanah vice-president Husam Musa, who on Monday disclosed documents revealing that the relief was granted under Section 56(3)(a) of Goods and Services Tax Act 2014 which concerns the finance minister's power to grant GST relief.