IN February, analysts questioned the viability of the RM120 billion Kuala Lumpur-Singapore high speed rail (HSR) project, raising doubts on the private sector’s ability to fund it. Some said the government has land that could be swapped with those to be acquired for the project.

A few days ago, market insiders said the project cost has been drastically reduced to about RM70 billion. This is even lower than the initial estimation of RM72 billion in 2013 when the project was first announced.

No definitive cost estimatation has ever been provided. 

In July last year, MyHSR Corp Sdn Bhd issued a request for information (RFI), calling for concept proposals which closed on January 15. MyHSR is responsible for the development and implementation of the project. The findings from the RFI evaluation will be presented to the Transport Ministry and cabinet and if the response is positive, there will be a request for proposal (RFP) to obtain detailed proposals.

In December 2023, Anwar said,the government will proceed with the project if the cost could be substantially lowered. 

Seven local and international consortia submitted the RFI and bidders requested for government funding. Japanese firms opted out because they deemed the venture too risky without financial help from the government.

In January, Anwar said the government would find out why the Japanese pulled out of the project.

I wonder at how the cost estimations of such a humungous project could be so easily and drastically trimmed in a matter of months. Was it possible it because of the statement that Anwar made in December 2023?

And was the realigned rail link via the troubled Forest City factored in? 

In March, The Edge Malaysia reported that three consortia were believed to be on the shortlist for the project.

Will there be a positive response from the Transport Ministry and cabinet to the reduced cost evaluation?

By the way, did MyHSR look at the report on why Japanese firms pulled out as requested by Anwar?  Shouldn’t we call back the Japanese firms if there are government support and the cost drastically reduced? 

Did we move the goalposts?

Meanwhile, will there be any land swaps to make the project viable? If so, it will definitely favour the successful consortia bidders. Though the government would be the eventual owner of the land and stations, the swapped lands could be put to other, more beneficial use in the short-term.

What is the estimated return on investment based on the new project estimates? Experts have cautioned that the revenue will not be enough to cover operating costs.

We also need confirmation from the Malaysian Institute of Economic Research that the government will not add a substantial burden to its current finances by taking on the project .

Indonesia learnt the hard way when the Jakarta-Bandung HSR suffered cost overruns. The government used state funds and loan guarantees to keep the project afloat. 

The lack of an HSR is not an matter of missed opportunity. It is wasteful spending when we already have the Electric Train Service running from Padang Besar to Johor Baru. We also have the Rapid Transit System Link (RTS Link), a very exciting and “visionary” project cutting acrosss boundaries, which innovations could serve as a launchpad for many more successful projects in the country.

As excitement mounts in Malaysia over the HSR, Singapore has delivered a more measured response to the new developments. Do not forget the issue of the asset company. Malaysia proposed to remove it but Singapore could not agree as it constituted a “fundamental departure” from the original agreement.

I also wonder about our decision-making process. 

What say you… – April 25, 2024.

* Saleh Mohammed reads The Malaysian Insight.