COMPUTER simulations by Japanese researchers indicate that the Kuala Lumpur-Singapore High-Speed Rail (HSR) project could benefit Malaysia by as much as US$1.589 billion (RM6 billion) a year, said a report.

The report, issued by the ISEAS-Yusof Ishak Institute in Singapore, said Singapore stands to benefit US$641 million.

The figures are for the year 2030.

The researchers plotted different scenarios for the 350km rail link, the project for which was signed in 2016 between the two countries but has been shelved, pending a review by the Pakatan Harapan government following concerns about its high cost.

The researchers looked at a direct service between Kuala Lumpur and Iskandar Puteri, a service between the two stations with intermediate stops, a direct service to Singapore, a service with one stop at Iskandar Puteri, and a service between Iskandar Puteri and Singapore.

The data entered includes HSR’s average speed of 200kph to 300kph, its cost at US$2 per kilometre, and the waiting time at each station.

The cost of an increased waiting time at the Customs, Immigration and Quarantine (CIQ) Complex between Singapore and Malaysia was calculated, with congestion resulting in a reduced economic impact.

In the scenario involving stops in Johor, the researchers said the state is the “top gainer” at US$617 million, followed by Kuala Lumpur (US$185 million) and Selangor (US$141 million).

“The states along the west coast of the peninsula and Singapore tend to gain from HSR’s domestic services, whereas three states along the east coast, as well as Sabah and Sarawak, lose some of their gross domestic product, but the amount is small,” said the researchers in a summary of their findings released by the institute today.

“Regions that have no stations tend to be negatively affected by the project. Johor is negatively affected if HSR’s express service stops only in Kuala Lumpur and Singapore.

“If it stops only in Kuala Lumpur, Singapore and Johor, then states like Malacca and Negri Sembilan are negatively affected. Thus, the specifications of HSR’s express/local services need to be very carefully planned.”

As such, they said, Malaysia stands to benefit more if the revised HSR has domestic stops instead of a direct link to Singapore.

“There is a need to consider policies that facilitate business transactions and travel between the countries in the HSR development.”

They said the services sector is likely to gain more from the project than the manufacturing sector.

Ultimately, they said, HSR’s full potential can only be realised with good supporting infrastructure, such as stations’ access to and from city centres, and smooth processing procedures at CIQ.

“An increase in CIQ time from 15 minutes to one hour reduces the economic impact by 9% and 34% for Malaysia and Singapore, respectively.”

The researchers are Kazunobu Hayakawa, Ikumo Isono and Satoru Kumagai from Japan’s Institute of Developing Economies. – July 27, 2018.