KUALA LUMPUR, NOVEMBER 2025 — Bilateral discussions between Malaysia and China are progressing toward the establishment of a special-purpose vehicle (SPV) to advance the rail industry through a government-to-government (G2G) passenger train leasing arrangement. This initiative highlights the deepening cooperation between the two nations in enhancing regional rail infrastructure and connectivity.

The proposed SPV will oversee a passenger train leasing program, with a Malaysian government-owned entity set to hold 51% equity in the rolling stock assembler. This collaboration follows a Memorandum of Understanding (MoU) signed on 16 April 2025 to strengthen railway-sector cooperation.

The partnership is expected to benefit Keretapi Tanah Melayu Bhd (KTMB), with plans to lease 62 new passenger train sets by 2027. The agreement, valued at approximately RM10.7 billion over 30 years, also covers maintenance, repair, and overhaul services, ensuring KTMB's operational efficiency and fleet availability.

The project involves CRRC Rolling Stock Centre (Malaysia) Sdn Bhd, which operates an assembly plant in Perak. Currently, CRRC Zhuzhou Locomotive Co Ltd holds 70%, with CRRC (Hong Kong) Co Ltd holding the remaining 30%. This deal represents a major investment in modernizing Malaysia’s rail fleet.

This collaboration aligns with broader trends of increasing Chinese investment in Southeast Asian rail infrastructure, contributing to improved connectivity and economic development across the region. It demonstrates a strategic approach to modernizing national rail services through international partnerships and significant capital investment.

Source: The Edge Malaysia