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AMONG Malaysia’s mega projects, the Kuala Lumpur-Singapore high-speed train (HSR) has gone through many ups and downs.
The two-year postponement for the 350km project ends in 12 days and the latest developments seem to point to Malaysia doing it alone.
A recent report claims that Malaysia will have to pay its southern counterpart RM300,000 compensation as it is no longer part of the scheme.
This raises the question of whether it is economically viable for Malaysia to continue the project now that the runway is proposed to end at Johor Baru.
With the Jurong East end point out of the picture, one analyst says that the return on investment that would have been 30 years could reach 60 years or more.
“Financially, it may not be prudent. Either we go to Singapore or we don’t. Between Kuala Lumpur and Singapore, we are talking about 40,000 daily passenger numbers if we are optimistic.
Analysts debate if necessary
“Before we talk about revenue, if it’s from Kuala Lumpur to Johor, where will the number of passengers come from?” asks the source.
As the runway would end at Bukit Chagar, Johor Baru, which connects to the planned Rapid Transit System (RTS) leading to Woodlands, the source asks if travelers are willing to go through the hassle with the availability of low-cost direct flights. from Kuala. Lumpur to Singapore.
“Previously, we thought the HSR was going to cannibalize air travel. If the end point is in Johor, it will be cannibalized for air travel.
“Either way, it is not something we need at the moment. We have double monitoring that can be improved and that would be sufficient for a country of our size.
“The HSR would be an infrastructure duplication where the contact points are very similar.
“Do we need a fast train that costs us billions and only saves us an hour or so in travel time? The tremendous cost just doesn’t add up, ”says the source.
Another point of view is the post-Covid-19 world and the emergence of other countries in the region that questions the need to link the economies of Malaysia and Singapore.
Malaysia needs to protect its competitive advantages.
Singapore has had many victories and has always been a direct competitor to Malaysia when it comes to investment.
With Singapore’s plans to develop Jurong East as the new central business district, initial plans for the HSR station to end there would better serve its purpose of developing that area, which in turn adds another layer of competition for Malaysia.
Another consideration is also the brain drain from Malaysia to Singapore, mainly due to its stronger currency.
In a report earlier this week, RHB Research says that the number of travelers between Kuala Lumpur and Singapore would increase significantly in the long term, given that the latter is an international financial center.
“If the HSR is going to end at Bukit Chagar, the spillover effect will not be as great, but it will remain positive overall, especially for the stations between the two terminals.
“Singapore’s weekend and local business travelers will be key contributors to passenger numbers,” he says.
While nothing is concrete until there is a government announcement, the research house says selective property accountants will likely see business opportunities in the future.
Assuming the previously proposed alignment remains unchanged, the main beneficiaries are Sime Darby Property Bhd
for its huge land bank in Labu and Pagoh, IOI Properties Group Bhd (land bank in Ayer Keroh and Jasin) and Matrix Concepts Holdings Bhd (land bank near KLIA / Seremban).
He adds that companies with large land banks in Iskandar can also benefit in the long term due to the realization of the RTS, which will be completed earlier in 2025 to 2026 compared to the HSR.
There has been no indication of the cost of the project, but the figures that have previously appeared were between RM68bil and RM110bil.
The higher figure allegedly included hidden costs that had not been disclosed when Barisan Nasional was in power.
It signed the bilateral agreement with Singapore in December 2016 to build the 350 km high-speed railway, but the project was temporarily suspended in May when Pakatan Harapan took power, citing high costs.
Malaysia’s political turmoil led to the collapse of Pakatan in February and sentiment on the ground leaned towards the revival of scrapped mega-projects, including the KL-Singapore HSR.
This was further consolidated when MyHSR Corp Sdn Bhd launched two tenders in August to appoint consultants for the project to assist with regulatory submissions to the relevant authorities.
As the deadline approaches, the government is expected to declare its position soon, if there are amendments to the plan or possibly arrange a new extension of the deadline, taking into account the consequences of the Covid-19 pandemic.
Sources familiar with the ongoing progress refuse to commit to any possibility, saying the matter is still being deliberated with Singapore.
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