By Jose Barrock
Suruhanjaya Pengangkutan Awam Darat (Spad)’s passenger numbers and other projections for the proposed RM30 odd billion High Speed Rail (HSR) project — linking Kuala Lumpur to Singapore — is said to have raised eyebrows among officials of Bank Negara Malaysia and the Ministry of International Trade and Industry (Miti), sources familiar with the matter said.
KiniBiz understands that Spad has projected a total number of 23.7 million passengers using the HSR annually, which the officials found hard to digest.
“They did a quick calculation and found that this works out to about 65,000 passengers a day or 3,600 passengers per hour assuming 18 hour operations…which is a lot,” the source said.
Spad’s chief executive officer Mohd Nur Ismail Mohd Kamal meanwhile could not be contacted for comment.
At present there are about three million passengers a year plying the Singapore-Kuala Lumpur air route, making it among the top 15 most busy passenger routes in the world.
How many people travel to Singapore via road and rail is not clear, but it is unlikely to be anywhere near the 23.7 million mark, even if those flying are added on.
The numbers were Spad’s projections. The projected revenue per year is RM4.27 billion at a rate of RM180 per ticket, which the land transport commission shared at a high level meeting recently.
KiniBiz understands that while most executives present were silent, both Bank Negara and Miti officials showed their surprise at some of the numbers shown by Spad and questioned the studies conducted.
Other details however were unavailable.
Bank Negara officials are also understood to be jittery and taking into account the possibility of more Malaysians working in Singapore, resulting in the human capital pool in Malaysia shrinking.
“Many will end up paying tax there in Singapore, reducing the Federal Government’s earnings as well,” the source added.
Also with the Singapore Dollar at RM2.60 to the Ringgit, there would be a big disparity between the earnings of individuals employed in the island republic and those in Malaysia. That could result in inflationary pressures as well.
Other concerns included the present damp economic climate.
“The sentiment (of Bank Negara officials) is understandable…. Malaysia is not exactly in the pink of financial health,” the source added.
A thorn in the Malaysian Government’s side is its high debt levels, which stands at 53% of gross domestic product (GDP – sum of goods and services produced). Malaysia also has among the highest household debt levels in Asia.
Several large ticket projects are likely to be shelved or scrapped for one reason or the other as a result of the economic climate.
Last month news reports had it that Malaysia’s current account surplus (net trade in goods and services) was falling at a rapid rate, and was at RM2.6 billion in the second quarter of the year, down from RM8.7 billion in the first quarter of 2013, and falling from RM22.9 billion in the quarter prior to that. This steep decline was brought about by slower exports and increasing imports.
Also some pundits say that Malaysia could soon be recording its first current account deficit since the Asian Financial Crisis of 1997.
Then, economic growth for 2Q of this year was pegged at 4.3% over the corresponding period last year, but fell short of economists’ expectations of 4.9%. The tepid 4.3% was achieved despite heavy election spending prior to the 13th General Election in early May this year.
The Central Bank, Bank Negara, in line with the slowing economy, cut its forecasts for the year to between 4.5% to 5%, from a projected 5% to 6% forecast earlier.
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