No room for error in KL-Singapore high speed rail project

The fast train to Singapore goes through major towns, and will halve travel time to and fro the republic. – The Edge graphics, June 13, 2015.

After years of discussion, the only thing that is now “pretty much decided” about the much vaunted and highly anticipated 330km high speed rail (HSR) that will halve the door-to-door travel time from Kuala Lumpur to Singapore, is that the alignment will run through Nusajaya, Muar, Batu Pahat, Malacca, Seremban and Putrajaya, according to Land Public Transport Commission (SPAD) CEO, Mohd Nur Ismal Mohd Kamal.

But with Malaysia’s chequered past when it comes to its rail projects – the electrification and double-tracking of the existing KTM line for an estimated RM24 billion, is an example of a project on which huge sums of money have been spent without the desired outcome because politics interfered with foresight and planning - the obvious question needs to be asked: can we get it right this time?

That is the question posed by The Edge Malaysia (The Edge) in its latest cover story (June 15-June 21) aptly titled "High Speed, High Stakes", in which the weekly looks at the possible socio-economic impact of the project, the considerations that need to be taken into account for a project of such scale, and the expected cost of the project which may grow beyond the estimated RM40 billion that’s been bandied about so far.

Taiwan’s 345km HSR line, which links 14 cities and which began operating in 2007, has the most similarities with Malaysia’s planned HSR.

Designed and built by the Japanese, it was modelled after the Shinkansen or the bullet train – and the Taiwanese spent US$16 billion (RM57 billion) on that.

The article also looks at Malaysia’s funding options.

Its debt-to-gross domestic product ratio stood at 54.5% as at December last year, so there may not be much room on the government’s balance sheet for the HSR, but there are off-balance sheet options available, either through a local public-private partnership, foreign funding or a combination of both.

The weekly pointed out that Malaysia will also have to figure out a way to share the cost with Singapore that both parties are comfortable with.

Even though they used to be connected by rail, the HSR project is vastly different. Malaysia is expected to fork out most of the cost, given that almost 90% of the tracks will be on its soil.

It also discussed how now seems to be an opportune time to kickstart the Kuala Lumpur-Singapore HSR as HSR players are getting hungry for jobs, hence giving both the Malaysian and Singapore governments more bargaining chips, at least in terms of pricing.

The realisation of the HSR has been tasked to SPAD, which has remained tight-lipped over the project as talks are still on-going with Singapore’s government.

Nevertheless, Nur shared his excitement with The Edge about the HSR, his vision of the project, the challenges he foresees, and more importantly, his almost-pledge that “we need to make sure the project isn’t just good but great”.

That will not be an easy feat for a project of this scale, as Nur has to balance expectations with the cost of the project.

But from what he told the paper, he seems to have his priorities right, for he knows that when it comes to building a RM40 billion railway line, there is no room for error.

“Within my scope, the construction of the project must be done at the lowest cost possible. Contractors can’t come into the project hoping to make big margins. And while we want to keep costs low, we have to make sure that the project delivers.

“Sure, we can go with a cheaper alignment or save cost on certain technologies. But at what cost? The cost to rectify problems in the future might be even more expensive.”

It is easy to see how, if done right, the HSR is bound to become a prospective rival for airlines – which The Edge also explored in the same cover story package.

Additionally, the writers also presented a precise rundown of what – and why – they deigned Malaysia has a chequered past when it comes to rail projects in. – The Edge Markets