(Yicai Global) Aug 10 -- Beijing-based infrastructure firm China Communications Construction Co. [SHA:601800] has started construction of Malaysia's East Coast Rail Link project after a groundbreaking ceremony on Aug. 9.

CCCC will prioritize the ECRL project and bring together the best resources to contribute to Malaysia's economic development, Liu Qitao, chairman of the Chinese firm, said at the event. Construction of the railroad will create 80,000 jobs and provide 6,000 stable employment opportunities once it is operational, he added.

The 668-kilometer railroad, scheduled for completion in 2024, will drive economic growth in three Malaysian eastern coast states: Pahang, Terengganu and Kelantan, Malaysian Prime Minister Najib Razak said during the event.

Trade in the Strait of Malacca and the South China Sea is much dependent on operations at the Port of Singapore, but once the ECRL and Kuantan Port Deep Water Terminal projects are completed, Malaysia will play a bigger role in large logistics transportation.

"This will greatly enhance Malaysia's international trading status because the railway can be used as a pan-Asian railway hub," Razak said. "After starting operations, it is expected to have a transportation ratio of 30 percent passengers and 70 percent freight."

The rail link will boost gross domestic product by 1.5 percent a year in the three states, he added. The project will reduce the travel time from Gombak to Kota Baru to less than four hours, much less than current average time of seven to twelve hours.

The project, part of the Belt and Road Initiative, also marks strengthening ties between China and Malaysia.

"As China's longest overseas railway project, the ECRL will promote relations between Malaysia and China and benefit the people," said Liow Tiong Lai, Malaysia's transport minister.

The ECRL involves a total investment of CNY85.64 billion (USD12.81 billion), with 85 percent of funding coming from the Export-Import Bank of China and the remainder from Malayan Banking Berhad [MYX:1155] via Islamic bonds.