Malaysia Seeks to Boost Trade with China and Thailand via New Inland Port and Rail Links

Malaysia is constructing a RM492 million inland port in Perlis to enhance trade with China and Thailand, aligning with rail networks to boost connectivity and reduce congestion at existing terminals.

Key Points

• Malaysia is investing RM492 million in the Perlis Inland Port (PIP) to boost trade with China and Thailand, aiming for completion by Q3 2025. PIP will handle 300,000 TEUs annually, augmenting Padang Besar’s 150,000 TEU capacity and connecting to key rail lines.
• The ECRL project, funded by a Chinese firm, is expected to enhance regional connectivity and trade, linking Malaysia to China’s Pan-Asian Railway. This infrastructure aim includes increasing bilateral trade with Thailand to US$30 billion by 2027.
• Transport Minister Anthony Loke emphasized PIP’s role in easing congestion at Padang Besar and fostering international trade partnerships. The port, developed by a joint venture, is projected to create over 500 local jobs and strengthen Malaysia’s position in logistics and transport.

Malaysia is embarking on an ambitious project to construct the RM492 million (S$148 million) Perlis Inland Port (PIP) in the state of Perlis, aimed at enhancing trade with neighboring countries, particularly China and Thailand. Scheduled for completion in the third quarter of 2025, the PIP is designed to augment the existing 150,000 twenty-foot equivalent units (TEUs) capacity of the Padang Besar terminal by handling up to 300,000 TEUs annually. This strategic development aligns with Malaysia’s goals to improve regional connectivity through reinforced railway links, including an established connection to Penang Port and a prospective connection via the East Coast Rail Link (ECRL) to Kelantan, positioning Malaysia to further integrate into China’s Pan-Asian Railway network.

The ECRL, a RM50.27 billion project built by a Chinese firm and financed by loans from China’s Exim Bank, will link Malaysia’s Port Klang to the east coast states. Transport Minister Anthony Loke emphasized the pivotal role of PIP in enhancing the connectivity of Malaysia’s rail infrastructure with international services, potentially transforming trade dynamics among Malaysia, Thailand, Laos, and China. The PIP also aims to alleviate congestion at Padang Besar, which has nearly maxed out its current capacity, reflecting a 21% increase in container handling in 2024.

Developed by Mutiara Perlis, a partnership of Mutiara Infra and the Perlis state government, the federal government will contribute over RM327 million toward essential infrastructure. The project is expected to generate over 500 jobs locally, enhancing economic opportunities. However, experts point out the challenges presented by security issues in southern Thailand, which may inhibit comprehensive investment in the region and affect plans for the Pan-Asian Railway. Despite these hurdles, Malaysia targets an increase in bilateral trade with Thailand to US$30 billion by 2027, demonstrating its commitment to bolstering trade relations with its ASEAN neighbors.

Source : Malaysia eyes trade boost with China and Thailand via new inland port and rail links