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China group secures $364m train order in Malaysia

CRRC Zhuzhou will supply rolling stocks for a suburban railway

Liu Hualong, CRRC ZELC's chairman, speaking in Kuala Lumpur on Wednesday.

KUALA LUMPUR -- Prasarana Malaysia, the national rail operator, has awarded a project valued at 1.56 billion ringgit ($364 million) to a China-led consortium.

CRRC Zhuzhou Locomotive (CRRC ZELC), Siemens Limited China, and Tegap Dinamik, a little known Malaysian company, will supply 42 six-car trains for the 37km Light Rail Transit 3 linking Bandar Utama on the outskirts of Kuala Lumpur to Klang, a coastal town.

Malaysia already has two LRT lines running and a mass rail transit linking the Malaysian capital to the suburbs. When completed in August 2020, LRT3 is expected to serve 74,000 commuters daily.

The consortium was the only contender in the bid, and will be responsible for the design, manufacture, installation, and commissioning of rolling stock. CRRC ZELC has already been awarded contracts on 10 projects in Malaysia, supplying trains for inter-city lines and the LRT Ampang line.

The 1.56 billion ringgit contract for rolling stock is part of the total 9 billion ringgit projected for LRT3.

CRRC ZELC is a key subsidiary of state-owned rail company CRRC Corp. The package reflects the growing bilateral relationship between China and Malaysia. "We would like to strengthen this trend going forward," said Liu Hualong, CRRC's chairman.

Malaysia transport infrastructure has long been neglected, and Chinese rail companies have expressed interest in bidding for a proposed Kuala Lumpur-Singapore high-speed rail.

"Hopefully along the way, there are some transfers of technology to Malaysia," said Ismail Adam, Prasarana's chairman.

The regional need for infrastructure is a boon to foreign investors, and China in particular has aggressively set about exporting its know-how to emerging economies. China's foreign direct investment in Southeast Asia grew from $6.4 billion in 2013 to $8.2 billion in 2015, according to RHB Investment Bank.

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