MALAYSIA and Singapore will finalise the details that are fundamental to the RM40bil high-speed rail linking two of the most developed capitals in Asean next year, barring any unforeseen circumstances.
An entity newly set up to specifically oversee the development of the highly ambitious rail project, MyHSR Corp is now working on details and inputs as well as assisting the Land Public Transport Commission (Spad) to be presented to the Malaysian Government for bilateral agreement.
As the chief executive of MyHSR Corp, Mohd Nur Ismal Mohamed Kamal, tells StarBizWeek, the details of the bilateral agreement between the two nations marks the next phase of the HSR project, not only for it to be kicked off the soonest possible but also in terms of providing further details on the project to protect the interests of both countries and potential bidders
“Yes, it all now depends on the bilateral agreement. We want to avoid a situation where there will be lukewarm response from bidders.
“And therefore a mutually beneficial structure and mechanism on how the project should be carried out should be in the bilateral agreement,” he says.
Basically, at the moment, Mohd Nur says the Request for Information (RFI) jointly conducted by both countries namely Malaysia’s Land Public Transport Commission (Spad) and Singapore’s Land Transport Authority (LTA) is vital to gauge market interest on the HSR, and how the market is expecting the implementation.
“We are now looking at the feedback for both governments to deliberate and agree upon. It must be attractive enough for players to participate,” he says.
The RFI exercise was kicked off on Oct 7.
“We want to use this exercise to gauge market interest in the project and solicit views on different models and approaches.
The feedback is crucial in helping us refine and validate our options, which will in turn help ensure a successful tender process subsequently,” according to a statement issued the Spad earlier this month.
Mohd Nur, who was also the former Spad CEO, says the initial market interest on this project has been phenomenal, as it is coveted as the most interesting HSR project globally.
“Many parties are keen to participate including country based consortiums, technology suppliers and financial investors.
“They are also keen to understand how both governments intend to jointly implement the project. And they have expressed interest but again it all boils down to the details going to be set out in the bilateral agreement,” he says.
Nevertheless, he affirms that the project is of course viable at least in the alignment from Bandar Malaysia going through stops in Seremban, Ayer Keroh, Muar, Batu Pahat, Nusajaya and ultimately Jurong East.
These potential stations are currently being reviewed to minimise cost and negative social impact.
Other one important factor that has been agreed so far in principle is the CIQ (Customs, Immigration and Quarantine complex) is going to be co-located where Singapore and Malaysia will have CIQ counters in Kuala Lumpur, Nusajaya and Singapore.
Mohd Nur says a lot more of technical and commercial aspects that both governments have to mutually agree towards the inking of the agreement.
“For examples we have to be on the same page on matters such as standards, procurement, construction, operations and maintenance. A joint-agreement between the two governments is important as it is a cross-border project and this adds additional layers of complexities to the planning. This is also includes the decision on the operator and track access charges amongst others,” he says.
Following this, it was reported that the 330km project is expected to be opened for international tender late next year.
Can Malaysia afford HSR?
Mohd Nur who does not want to neither agree nor dismiss the RM40bil price tag as of yet says, the source of funding would depend on the eventual project structure- one of the main points in the bilateral discussions.
“It could be fully funded by the governments, partly funded through public-private partnerships or fully funded by the private sector.
“And the funds are not to be fully drawn down at one go. It is going to be spread out throughout the construction period,” he says.
But, he is hoping that the sluggish market now due to the fall in currency and weak commodity prices is a temporary glitch, if not it is something be concerned about.
“I believed that the private investors will be concerned with long gestation period for return on investment,” he says.
But, deep-pocketed investors should be interested as the project includes many economic and real-estate spin offs along the line as the government is committed to support development within a 5km radius around some selected stations.
“The line is going to be an economic catalysts for the country.
“The reduced travel time will enable access to wider pool of talents in Malaysia and Singapore.
“The two countries combined GDP is close to the top 15 in the world, that should be an attraction foreign investors,” he says.
Additionally, Mohd Nur explains that they are also learning from other similar projects around the world such as in China, France, Germany, Japan, Korea, Spain and Taiwan.
“There are on-going HSR projects in Brazil and Jakarta. We are also looking at HSR system that are in operation such as in the UK.
“We will see how the agreements is going to pan out soon. Until then, nothing is absolute yet,” says Mohd Nur.
Mohd Nur explains that MyHSR is still a new entity even without a logo yet, but they are looking for talents now.
Currently MyHSR is carrying out a corporate logo competition for MyHSR with more than RM30,000 worth of prizes up for grab.