By Stephanie Jacob
In the last of a five-part series on high-speed rail our writer delivers her opinion on what needs to be done pre and post the project so that it actually does what it is built for at a cost which is justifiable.
So often in this country, decisions are made too quickly and for the wrong reasons. Too often multi billion ringgit projects are undertaken because it fits in with the country’s desire to be seen as developed, or to line the pockets of a select few with the right connections.
Lee Hsien Loong and Najib Razak
The proposed High Speed Rail (HSR) link has that feeling about it – where none of the powers that be seems to want to give Malaysians the full picture, but are keen to assure us that it is a piece of art.
Malaysians have been told that we need a RM30 billion (at the very least, it is more likely to be closer to RM50 billion) rail link that will get us to Singapore in 90 minutes. Why we need it, is a lot less clear.
A HSR link will definitely make travelling down to Singapore faster and easier. Furthermore, as supporters of this link will tell you, it might result in the growth of various industries. Construction, property, tourism and the environment, are all touted as possible beneficiaries of the link.
With HSR links it is easy to get caught up in the possibilities; it is equally easy to lose sight of the realities that come with not only building such a link, but maintaining it in the long term. However with a possible RM50 billion price tag attached – it is prudent to step back and ask if such a link is in fact necessary at all?
It is a good time as any to keep in mind that there is already an extensive double tracking rail network being built – one that has already experienced lengthy delays and cost overruns. Once complete, the project will have cost the country an estimated RM36.7 billion. But poor planning and implementation aside though, in three years (with the completion of the Gemas-JB line) there will be an extensive system connecting much of country in place.
But the double tracking network is not the status symbol that the HSR link is – or as expensive. Furthermore there has been criticism that travel time on some parts of the lines has not been significantly reduced. But in most cases it is because the right types of trains are not being used. If the right type of rolling stock can be procured – we will have a fast speed rail system with the potential to cut journeys in half at a considerably smaller price tag. Not quite 90 minutes, but still worth considering.
At the very least, if we can get that multi billion ringgit system running at an optimum level; we do not have to rush into a project that should it fail, would have long and painful effects on our economy.
Which bring us to the high speed at which this proposal is travelling at. YTL’s Francis Yeoh first suggested this project in 2006 and it was brought up again in 2009. Both those times it was seen as an unnecessary investment and shelved.
Now we are hearing that the project is a go – and is so crucial to the country’s future growth, that the announcement could not even wait four months to coincide with the completion of the feasibility studies.
The fact is that nothing in this project in known for sure; yet that it seems to have the blessings of both the Singaporean and Malaysian governments is bemusing to say the least. Prime Minister Najib Abdul Razak has commented that the initial numbers look good and as a business plan it is doable, but what is he basing this on?
If the Prime Minister has facts that are enough to convince him that this project is viable then surely there are some numbers and research that can be released for public scrutiny.
As of now, we are relying on SPAD to drop bits of information every now and then to reassure us that we should not be worried about things like fare and alignment.
Mohd Nur Kamal
Chief executive officer Mohd Nur Kamal has said that the fare is likely to be between that of an airline ticket and a train ticket – presumably around RM130. It is not clear how he came to this figure. Analysts though opine that RM200 to RM300 are about as low as fares can be, and say that those rates will barely cover financing costs.
At RM300 per ticket, assuming a project cost of RM50 billion and a five percent financing rate the link would need a ridership of 8.3 million travellers per annum to simply cover the financing costs, and that is before repayment.
At such rates, business people and foreign tourists look likely to be the only ones capable of affording this link – but will this catchment be enough? Only SPAD can tell us, and one hopes that when they do – figures will be accurate and not skewed to justify the project.
What SPAD should have done, and what it should do now is ensure that when it does release its feasibility report – the report is readily available for analysts, economists and regular Malaysians to scrutinise. Should there be issues, SPAD must be willing to go back to the drawing board or even scrap the project in its entirety if it is found to be unfeasible.
If after the report has been debated and discussed, SPAD’s fact and figures still stand up to examination and a HSR link is found to be the best option for the economy – then attention must quickly shift to ensuring that management of the project is perfect.
SPAD can do this by emphasising that it will be adopting international standards in the evaluation of all companies wishing to participate in the project. It will also be good if they put professional monitoring systems in place to ensure that infrastructure and safety standards are up to scratch and that the environment does not fall victim to development.
SPAD must reassure us that every inch of this rail link is above board. With tens of billions at stake, Malaysia can ill afford for the price tag to get any steeper as a result of poor planning, delays or worse still, through kickbacks and corruption.
Yesterday: Winners and losers
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