M'sia-S'pore high-speed rail: Fares may not be cheap


PETALING JAYA: Don't expect fares on the planned high-speed rail (HSR) project from Kuala Lumpur to Singapore to be cheap.

Although structured on a public-private partnership (PPP), the government will play a significant role to help fund this infrastructure project.

And with this in place, the HSR would have a “strong commercial viability and sustainability of its operations”, a rail expert told StarBiz.

He said that the other main commercial components of the HSR would likely be recouping the investments from property development, akin to the business model of the Mass Rapid Transit and Light Rail Transit projects.

“The ticket fare structure would play a big role in determining operational sustainability (of the HSR project).

“Hence, it would not be cheap to travel by high-speed or bullet train; it might be more expensive than a budget airline fare. But, it will be a matter of choice as for me.

“I would rather pay a little bit more as I can board the train and arrive in the city centre, without the hassle of travelling to the airport. I guess it would be more comfortable, too,” one observer told StarBiz.

It is estimated that 3.5 million passengers travel via air on the KL-Singapore route every year, with growth rate of about 6.8% a year.

Land Public Transport Commission (SPAD) said the HSR was envisaged to offer both express and transit types of services.

According to SPAD, the HSR would be built via a PPP with strong government participation.

It is reported that the estimated cost of building the HSR could be around RM30bil to RM40bil.

Meanwhile, the race has begun among players to get a slice of the ambitious HSR project.

Industry sources said that some of the “usual suspects” were in the running and had singled out YTL Corp Bhd, DRB-Hicom Bhd, UEM Group and a rail China company as contenders at present.

“While these names are being bandied about, there's also the possibility of one or two more dark horses' emerging to put in a firm bid as well,” a source said.

These groups are said to be tying up with various equity and technology partners and have a variety of proposals.

In the past, other names such as SCOMI GROUP BHD and China Infraglobe Consortium-Global Rail Sdn Bhd have also been associated with the KL-Singapore HSR project.

Some of these groups are proposing the magnetic levitation (maglev) technology, while others are more comfortable with the traditional HSR system.

There is also talk that the YTL group could be vying to become the project delivery partner, or PDP, for this project a concept that was first introduced in the MRT project. YTL's Tan Sri Francis Yeoh could not be reached for comment.

The HSR buzz here has also garnered interest from other global companies, including South Korea's Posco Engineering & Construction Ltd and US-based General Electric (GE).

Posco has set up an operations centre in Malaysia with the intention of jointly bidding for railway projects in the country with a local party, while GE plans to sell its trains.

Meanwhile, SPAD anticipates that the feasibility study of the HSR is slated for completion by the year-end, as it would involve input from its Singapore counterpart as well.

SPAD, as the lead agency for the project, has been carrying out the feasibility study and can now confirm that it was nearing completion of Phase 1B of the study.

The study has evaluated the viability of the project from a technical and financial perspective, and also looked at its economics and preferred financing structure as well as assessing its broader socio-economic impact and potential development paths.

“The scope of the study has also looked at defining an alignment which is technically feasible and yields optimal revenue.

“The study has also carried out primary market research to assess the revenue potential of the project, in addition to carrying out bottom-up costings based on a preliminary design, defining a preferred funding structure and also assessing the impact of the HSR on other transport modes.

“In addition, it has also assessed the impact on other transport modes and the extent of broader socio-economic benefits,” it said in a statement yesterday.

To date, SPAD has engaged with various levels of stakeholders at the federal and state levels, as well as the private and public sectors.

Feedback received has been refined and tested against international case studies, with input from technical experts, and modified based on the different local conditions and needs.

SPAD noted that HSR projects worldwide had catalysed other spillover developments, and that the Government intended to ensure the same via a planned and structured plan at hub level to increase the likelihood of capturing broader socio-economic benefits, to concurrently attract economic activity to drive urban regeneration at each hub.

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