A READER’S letter on the KL-Singapore high-speed rail (HSR) in the New Straits Times, dated November 23, was an interesting piece to read but contained several fallacies.

Citing what the United States is spending on to revive their declining economy is quite okay, but to take a leaf from there in order to revive our Malaysian economy, is a fallacy not worth pursuing.

Let’s take a look at what has been said and compare the two contrasting scenarios; the US situation and our local Malaysian situation.

These are represented by the two paragraphs below (with my additional words in brackets):

US scenario: When the US government splurges on infrastructure projects, (local American) companies need to hire (local US) workers to get the job done. More (local Americans) people will be employed or enjoy (very) high wages and they, in turn, will spend more, creating even more jobs and downstream economic activities that lead to an expansionary economy.

Malaysian scenario: When the Malaysian government splurges on infrastructure projects, (foreign contracting) companies need to hire (foreign) workers to get the job done. More (foreign workers) will be employed or enjoy (very low) wages and they, in turn, (will remit payment back to their home countries) and spend less in Malaysia, creating (fewer) jobs and (not many) downstream economic activities that (does not) lead to an expansionary economy.

I think there is no need to explain the differences as to how the economy really works within the two countries.

HSR design criteria

US’ massive spending strategy is obviously to aid its own economy. They employ their own design engineers, architects and builders. These professionals will undertake the studies, design works and specify local contents for the projects.

Locally manufactured materials will help to generate businesses for their own homegrown industries, manufacturers and suppliers.

They would not specify to buy rails, sleepers, signalling equipment, electric cables, various building equipment and machineries, building materials, locomotives and coaches from China. They have their own industries, manufacturers and suppliers to protect.

Whereas in the case of Malaysia, we will start by employing foreign consultants and foreign design engineers to study and undertake the designs and put together all the rail specifications.

As this project is new to Malaysia, we obviously do not have local talents, expertise and all the required technical people who have the knowledge and experience, to undertake such works. This so called front-end engineering and design (or FEED) will most likely be undertaken by foreigners.

Not many Malaysians have the knowledge and experience in designing and building a high-speed railway. This is an exclusive domain of the Europeans, Americans, Japanese, South Koreans or the Chinese.

Therefore, in the process, foreign designers will specify items from those countries from where they come from or from countries they are familiar with.

Similar to our experience with the East Coast Rail Link (ECRL), where all the designers and engineers were from China, all ECRL-related specifications were obviously from Chinese manufacturers and the subsequent materials also coming from that country.

In the case of HSR, Malaysia will end up importing all the required materials, every single component including bolts and nuts. We don’t have the capability to produce any of the required components locally.

So, where is this argument about our local economy benefitting?

The truth is, our local economy will not benefit. Only foreign companies will benefit as we will import every single component from them, proven many times in  past cases of light rail transit, mass rapid transit, ECRL and other rail-based projects. 

Forest City

The writer also mentioned Forest City as a project that is beneficial to Malaysia’s economy. I hope he was being sarcastic.

I am sure our readers would be happy to be given data and economic statistics on this controversial project.

For instance, how many Malaysian companies were awarded the contracts in Forest City? What’s the total contract value awarded to these Malaysian companies, if any? 

How many Malaysian professionals, managers and workers were hired for the planning, design, management and construction at Forest City?

How many Malaysians (professionals and workers) were employed in total?

Please share with us the total monthly wage bills paid to Malaysian professionals, managers and workers. 

From the wage bills, we could calculate the actual economic benefits for the country.

I am also hoping that after the Transport Ministry (MOT) announced yesterday that the cost for ECRL will remain at RM50 billion, further announcements will be made on the value of contracts awarded to Malaysian companies.

It will be useful also if MOT were to let the public know how many local professionals, managers and workers are employed by ECRL. – December 3, 2021.

* Rosli Khan reads The Malaysian Insight.

* This is the opinion of the writer or publication and does not necessarily represent the views of The Malaysian Insight. Article may be edited for brevity and clarity.