Mahathir fails to give a hard “No” to the HSR project

The new Prime Minister of Malaysia said that his government will find out how it can reduce the amount of money it has to pay to Singapore if it needs to drop the Singapore-Kuala Lumpur HSR project (high-speed rail project). But the new Prime Minister stopped short of saying a firm ‘No’ to the project.

“The terms and agreement for the HSR are such that if we decide to drop the project, it would cost us a lot of money. We have entered into an agreement with Singapore. If we break the agreement, we have to pay a very large sum of money,” Dr Mahathir said.

In December 2016, Singapore and Malaysia signed an agreement to build a multi-billion dollar, 350km high-speed rail link between the two countries. The HSR project has been a shot in the arm for developments in and around the Jurong Lake District area. But some have speculated that the election of Dr Mahathir and his coalition is likely to have a dampening effect on developments around the Jurong Lake District area.

In his interview, Dr Mahathir hinted that his immediate attention could be focused on another Malaysian rail development – the East Coast Railway Link (ECRL) instead of the HSR project. Citing the project’s cost of S$18 billion, as well as feasibility and practicality issues, Dr Mahathir said that he will renegotiate the terms of the ECRL.

He said: “[Former Prime Minister Datuk Seri Najib Abdul Razak] knew very well that the ECRL, for example, is something we could not afford. It is not going to serve any purpose. It is not going to give us any returns. And yet, he went ahead and decided to build it.”

Adding: “The government’s debt ceiling before was very much lower. But he [Najib] didn’t care. What he did was he formed a body and then they borrowed. And eventually it [the borrowings] comes back to the government to pay.”

In describing the ECRL project as “strange”, Dr Mahathir noted how the ECRL project seemed to be lopsided against Malaysia.

Calling the previous government’s attempt to roll-out both multi-billion-dollar developments like the HSR project and ECRL all at once as “crazy”, Dr Mahathir faulted Najib for not thinking how Malaysia was going to pay for all these projects.

Even though it looks unlikely that the HSR project will be derailed by the Malaysian government, those that have bought properties in the area (or are looking to buy one there soon), need not be overly concerned that prices of their properties will plummet if the plug is pulled from the HSR project.

This is because even if the HSR project is expected to deliver higher property prices and rev up commercial and retail activity in the Jurong Lake District area, the developments in the area itself is hinged on the Singapore Government’s blueprint for the Jurong Lake District, which was first unveiled in the 2008 Master Plan when the area was earmarked as a new growth area.

There is now some 160 hectares of land that is yet to be developed within the 360-hectare district. More than 40 per cent of the mixed-use business area is set aside for residential purposes. Developments for the Jurong Lake District are centered around the Jurong East MRT station. With established businesses around the MRT station – like the International business park, IMM (a major shopping mall), along with other new shopping malls, a hospital, educational hubs, high rise offices and residential units – Jurong Lake District is looking very credible as a regional centre even without the HSR project.

According to the URA’s Masterplan, most of the developments will be centred around Jurong Gateway for a start. Jurong Gateway is also most likely to be the crown jewel in the Jurong Lake District vicinity. With a catchment consumer base of Jurong East HDB dwellers and the Lakeside village (a designated dining place) the Jurong Lake District is likely to be developed fast and find success quickly. Good tenants at Lakeside village may bring people closer to enjoying the lakeside. Lakeside village is connected via bridges to Japanese Garden and Chinese Garden, bringing lakeside enjoyment to the residents staying nearby.

Projects along Yuan Ching Road are yet to be developed, but once this area develops with waterfront hotels, it would revitalize the area and possibly lead the Jurong Lake District to become a reality much sooner – in 5 – 7 years time. Some HDB flats around Ho Ching road area in the Jurong Lake District are built in 1972 and are ripe for selective en-bloc redevelopment, at 42 years old.

Besides, the stakeholders in the western part of Singapore are also expected to get a boost from the announcement of the seventh MRT line – the Jurong Region Line. The new line will serve the Jurong area and the western part of Singapore and is expected to lift the fortunes of not just the properties in the Jurong Lake District area, but also the real estate in Boon Lay and Choa Chu Kang.

The Jurong Region Line will be 24km long with 24 stations, and will run above-ground. It will open in three phases, starting from 2026. The Jurong Region Line will give commuters route choices. For example, the two interchange stations at Choa Chu Kang and Boon Lay will connect the North-South Line (NSL) and East-West Line (EWL), giving commuters alternative travel routes.

So what’s driving the interest in the Jurong Lake District area is not the HSR project, but the successful transformation resulting from the Jurong Gateway initiative. The HSR project, if it takes off, will only be a nice bonus to the buyers of property in that area.

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