The race hots up for High Speed Rail project

  • Business
  • Saturday, 02 Jan 2016

IN the race to clinch the RM40bil high-speed rail (HSR) deal connecting Kuala Lumpur and Singapore, China Railway Engineering Corp (CREC) may be a step ahead of its competitors as it also owns a stake in Bandar Malaysia, slated to be a transportation hub of the bullet train service.

CREC and its Malaysian partner, Tan Sri Lim Kang Hoo’s Iskandar Waterfront Holdings Bhd (IWH) collectively owns 60% of Bandar Malaysia Sdn Bhd (BMSB), which is the project owner of the 486-acre Bandar Malaysia.

Although China Railway Group Ltd project director Cai Zemin gently brushes off the ‘advantage’ of its stake in Bandar Malaysia in its bid to export its HSR expertise to Malaysia and Singapore, the state-owned company does not deny its keen interest to be the developer.

“Yes, the group is a reputable HSR developer from design to construction. We could provide end to end solution for HSR in Malaysia as what we are doing in the recently announced US$5bil Jakarta-Bandung HSR,” he says.

China had already contributed heavily in Malaysia’s transport industry, having supplied more than 80% of the rolling stocks in the country, according to a news report.

China’s closest competitor could be no other than its Japanese counterpart, that boasts on its shinkansen rail technology.

Both China and Japan are head to head in getting a stronger industrial and political foothold in the region through HSR projects.

Although Japan lost to China in Indonesia HSR, it redeemed its pride with the award of US$15bil Mumbai-Ahmedabad HSR in India.

According to a recent news, the behind-the-scene competition between the two could be less decorous. A Japanese official was reported to have contended that China has no proper business plan for the Jakarta-Bandung line and was making promises it cannot keep. An example is the Northrail project in Manila that reportedly has not been completed.

Meanwhile, China is proud of a cheaper cost of building HSR systems, claiming it had not lost to Japan in the Mumbai-Ahmedabad HSR project as there was no open tender.

A new player that recently emerged to bid for the Kuala Lumpur-Singapore project is South Korea, and it is making it a grand entry to the local scene with a recently established showroom that is specially designed to create awareness of their experience and know-how in HSR in Kuala Lumpur.

The government of South Korea has organised a consortium that will work on the bid for the project and will include the Korea Railroad Corp, Korea Land & Housing Corp, Korea Rail Network Authority (KRNA), top construction companies of South Korea and South Korean maker of HSR trains Hyundai Rotem Company.

In general, KRNA is leading a consortium of 50 enterprises and will also be opening their doors to Malaysian and Singaporean companies soon.

The authority’s chairman and chief executive officer Kang Yeong Il in a news report says this would be the first time both rail-related South Korea government agencies and private corporations formed a consortium in such a large scale to bid for the country’s first HSR line.

“We are well prepared to cover all aspects of the HSR development here, from construction, operation, rolling-stock, financing, signalling system to development of new townships along the line,” says Kang.

KRNA, alongside 14 other interested parties, including CREC, have participated in the recent request for information exercises conducted by the Malaysia Land Public Transport Commission. KRNA has given it views, including the pros and cons of government versus privately operated HSR.

The HSR is Malaysia’s most sought-after infrastructure project in the next two years and the pressure to clinch the job is getting more intense with future plans to extend the line up to Bangkok.

The HSR is dubbed as South-East Asia’s most ambitious infrastructure project and the region’s first HSR along a 340km link. It will greatly reduce the travel time between the two neighbours to 90 minutes from about four hours by car.

Malaysia and Singapore are expected to finalise the details that are fundamental to the HSR linking two of the most developed capitals in Asean in a bilateral agreement early this year, barring any unforeseen circumstances.

Related stories:

Bandar Malaysia a boost for IWH listing

Lim’s companies may draw interest

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