'RM2b redevelopment for Kerteh-Kuantan rail link'

Malaysia Chronicle, March 25, 2013

BETTER CONNECTIVITY- It will be upgraded to double tracking to serve passengers THE railway track between Kerteh in Terengganu and Kuantan in Pahang, which is owned by Petroleum Nasional Bhd (Petronas), will be redeveloped under a private finance initiative for about RM2 billion, according to sources.

It is believed that companies like IJM Corp Bhd, Loh & Loh Construction Sdn Bhd, UEM Group Bhd and DRB-HICOM Bhd may express interest in the redevelopment job. The 72km single-track railway line was built in the 1990s with funding from Petronas. The line, managed by Keretapi Tanah Melayu Bhd, ceased operations more than a year ago.

"It stopped operating due to the sub-standard railway infrastructure and was also not safe," said sources close to Petronas. Under the East Coast Economic Region Master Development Plan, the Kuantan-Kerteh railway link has been identified for redevelopment to include passenger services.

"This will be a private finance initiative and there are several companies which have indicated their interest," a source said. The source said the existing single track will be upgraded to double tracking with modern railway electro-mechanical system, including electrification, to serve passengers. It will be developed in two phases. Phase One will link the line with Kuantan Port and the Gebeng Industrial Estate, while Phase Two will link it with Kuala Lumpur via Mentakab across the Main Range (Banjaran Titiwangsa), the source said.

"This will eventually turn Kuantan Port into the eastern border gateway to the Pacific and China, thus easing the heavy traffic in the Straits of Malacca and also shortening the travel time for vessels," he added. The rail line links the Kerteh Petrochemical Complex and Kuantan Port, with a direct connection to the Gebeng Industrial Estate. It crosses five districts in Kemaman (Kerteh, Kemasik, Ulu Chukai, Binjai and Banggul) in Terengganu and Sungai Karang in Pahang.

The line was built to strengthen the transportation link between Gebeng and Kerteh, and to enhance the petrochemical linkages between Pahang and Terengganu. Petronas is a major investor in several petrochemical ventures in both states. The rail line was built to handle cargo and traffic generated from petrochemical ventures.

At that time, around 2.8 million tonnes of cargo like ammonia, acetic acid, PVC, vinyl chloride monomer, paraxylene, benzene, ethylene and propylene were generated from the Kerteh Petrochemical complex. The Kerteh-Kuantan railway line started with two diesel locomotives and 24 flat container wagons running twice a day. It handled about 35 to 40 twenty-foot equivalent units of cargo per day.

The railway track has sub-lines to Kemaman Port, which is 33km from the Kerteh Petrochemical Complex, and from the main track branching out 66km to the Gebeng Industrial Estate.