The proposed Kuala Lumpur-Singapore High Speed Rail (HSR) project could see a delay due to issues of funding and geopolitical tensions, The Edge Review reported.
It said that costs are likely to be as high as US$12 billion (RM39.2 billion) for the 340km rail link, which could cut travel time between KL and Singapore from six hours to merely 90 minutes.
The report said that in previous joint ventures between both countries, such as the Second Link bridge which opened in 1998, both countries had financed road construction in their respective territories.
However, this “simplistic approach” cannot be used in the upcoming HSR project, infrastructure sector experts told The Edge Review, quoting Malaysian economic planners.
They argued that the economic benefits of the project showed that both governments must map out an equal funding formula.
Putrajaya, said the report, wants to develop Malaysia’s rail industry to increase connectivity, ease traffic congestion in its major cities and draw foreign direct investment as it struggles against competition from Thailand and Indonesia.
The government has indicated that it intends to pump up to RM160 billion in rail projects by 2010.
However, The Edge Review said financial constraints – caused by Putrajaya’s weak finances – are forcing the country to look at alternate funding options.
“Singapore may need to step up to the plate and take on a bigger role in funding this project,” a Malaysian economist close to Prime Minister Datuk Seri Najib Abdul Razak’s administration was quoted as saying.
But the report said although Singapore was eager to see the HSR project take off, allocating the financing based on perceived economic benefits could raise some issues.
“It is hard to see Singapore agreeing to something like this because it is a difficult call to make on who really gains more,” Manu Bhaskaran of Centennial Asia Advisors was reported as saying.
Yesterday, Land Public Transport Commission (SPAD) chairman, Tan Sri Syed Hamid Albar said that Malaysia will begin finalising details of the HSR project with Singapore in the first quarter of next year.
“As far as the feasibility study is concerned, we have submitted (the report) to the (Malaysian) government and they have accepted it. It will go to both the Prime Ministers (of Malaysia and Singapore).
“Two committees have already been established, a technical and a joint ministerial committee,” Syed Hamid had said, adding that Singapore is still doing its own feasibility study expected to complete next year.
He had also admitted that the HSR “was a whole new level” in rail technology, but assured that local rail engineers would be sent for training overseas once the government had decided the country from which the technology would be sourced from.
Seven HSR stops have been confirmed on Malaysia’s side, namely Kuala Lumpur, Putrajaya, Seremban, Ayer Keroh, Batu Pahat, Muar and Nusajaya. – October 24, 2014.
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