By Stephanie Jacob
High speed rail between Malaysia and Singapore has not only been revived but endorsed by the prime ministers of the two countries. It comes at a huge cost – at least RM30 billion and as much as RM80 billion. But is it really necessary or feasible? And what’s the right way to go about it. In the first of a five-part series, KiniBiz looks at the unanswered questions the project poses.
On Feb 23 at a joint press conference in Singapore, the Prime Minister of Malaysia, Najib Abdul Razak and his Singaporean counterpart Lee Hsien Loong announced that the two neighbours had agreed to build a high speed rail (HSR) link to connect the Malaysian capital Kuala Lumpur with Singapore.
Lee Hsien Loong and Najib Razak
Both premiers called the rail link a game changer and declared, “it will usher in a new era of strong growth, prosperity, and opportunities for both countries. Ultimately, this project will give both countries greater stakes in each other’s’ prosperity and success,” a joint statement read. But will it?
The idea behind it is simple.
The HSR will reduce the 350 km journey that can take up to eight hours on a regular train or up to five hours by bus or car to a mere hour and a half. Some even say that it will be even quicker than flying, if additional time factors such as check in, security screenings and baggage claim are added to the actual 45 minute flight.
The implementation however is not so simple.
This is not the first time such a high speed rail link idea has been mooted. In 2006, YTL Corp first broached the idea of a rail project being undertaken to the tune of RM8 billion. The proposal was shelved because of the high price tag. It was mooted again in 2009, but deemed unnecessary because it was determined the North South Highway could adequately handle the traffic. There were also suggestions that the government did not want to jeopardise a lucrative air route for Malaysia Airlines.
Why the timing is now right to undertake such a massive project is more than a little unclear. Suddenly, it would seem that the rail link is not only doable but is a necessity that we cannot do without.
To answer this question is harder still, given that important feasibility studies that the Land Public Transport Commission (SPAD) were commissioned to do is yet to be completed.
The idea of announcing any project without the feasibility studies being completed to justify and back it up, is an anachronism in itself. One might assume that the project has already been deemed possible, and what is being determined now is the best and most effective way forward.
So what do we know about this project?
Both Najib and Lee have referenced the Eurostar rail link between the business and tourist hubs of London and Paris as a blueprint of what they hope the KL to Singapore link will resemble. Otherwise the attention grabbing but ultimately sparse announcement offered little in way of details.
Najib offered that the project was slated for completion in 2020 – while adding a caveat suggesting that implementation details may cause an extension of the date.
He also said that it will be a private-public venture, with “private sector funding with the government providing structural support and participation,” he explained. But neither Prime Minister was willing to comment on who in the private sector might be willing to take on the project.
Of course the usual names have been thrown into the mix – local newspapers and industry talk have been tossing names like the YTL Group, UEM, Hartasuma and any one of Syed Mokhtar’s many companies into the mix. International companies such as the China Railway Engineering Corporation and several others from Taiwan, Korea and Japan could also be potential bidders.
While such interest for the project might be viewed as positive affirmation – economists are concerned of the impact that private investment will have on the patronage of the link. After all, one of these players will have to recoup their massive investments somehow – and it will most likely be through ticket sales.
Terence Gomez
Terence Gomez, a University Malaya economist says that the HSR could potentially benefit a host of sectors including the economy, tourism and even have a positive impact on the environment. Though he maintained that it must be accessible in terms of price, and that can happen if it is under government control – as subsidies and other price controlling measures can be put in place to ensure accessibility.
“I don’t like the idea of private investment…I would rather it be a public-public venture” said Gomez. He said he believed the project would be much more viable if undertaken by the Malaysian and Singaporean governments – especially since the Singaporeans already have the expertise.
How much it takes to build such a link is also a matter of debate. When YTL first suggested the rail link, the figure being thrown about was RM8 billion. With the latest announcement, the figure seems to have risen RM30 billion to RM40 billion – and there are some suggestions that even this may be a wishful estimate.
A publicly accessible feasibility study conducted in 2011 in Australia, estimated that a slightly shorter HSR link would cost from close to RM50 billion to RM80 billion.
So which figure is it? Bear in mind, that none factor in the costs overruns that seem to be inevitable in this country.
Certainly the idea of being able to travel to Singapore in an hour and a half does have a nice ring to it. The possibility of more Singaporeans coming over and bringing an influx of their Singapore dollars is also not to be scoffed at – but will this actually transpire?
An article in the Economist magazine highlighted that the benefits for cities with high speed rail systems are not always mutual. In fact, the article details that the richer more developed city often reaps more of the advantages at the expense of its less developed or poorer counterpart.
Could we be just sending more investments and tourists to our Southern neighbour, at our very considerable expense? If so, surely we are taking being neighbourly a bit too far.
Pakatan Rakyat has suggested that the country would be better served by an interstate rail link rather than one just heading south. Some critics have suggested that there are no real benefits for any high speed rail project and it should be scrapped altogether.
Drawing a comprehensive picture of this project is difficult, especially since there are so many blanks left to fill in. Is this the project that will bring the most economic benefits and convenience to Malaysians?
Over the next few articles, KiniBiz will look into some of the questions that are being asked – we will look at the feasibility studies being put together by SPAD, and try to get a better idea of the makeup of this project. We will focus on funding issues and long term accessibility. Finally we will look at who stands to win and who might lose as a consequence of this project and what else could potentially be done to improve Malaysia’s transportation infrastructure.
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