Fitch Solutions: KL-Singapore HSR likely to get green light

  • Corporate News
  • Thursday, 13 Feb 2020

The research house said it believed the project would “eventually get the green light”, based on a number of factors supporting its revival in the short term.

PETALING JAYA: Fitch Solutions expects the KL-Singapore high speed rail (HSR) project to be revived and will get strong bids from Japan and China.

The research house said it believed the project would “eventually get the green light”, based on a number of factors supporting its revival in the short term.

“These include the potential economic benefits that could be reaped, the growing possibility of a reduced project price tag, the revival of Bandar Malaysia and a weak short-term economic outlook for 2020, ” it said in a note.

The research house said there is a strong business case for the construction of the HSR line, given its potential economic benefits.

It noted that the KL-Singapore air route is among the world’s most heavily trafficked international routes while a journey from downtown Kuala Lumpur to downtown Singapore is estimated to take more than four hours by road.

The original HSR plan, it noted, could shave travel time by an hour and a half.

“With increased accessibility, the local economies of Batu Pahat, Muar and other locations along the proposed alignment are also likely to benefit from the project, ” it said.

It also noted a scope for a reduction of the overall project cost.

The revival of the East Coast Railway Link (ECRL) project, it said, proved that the Malaysian government was willing to bring back big-ticket infrastructure projects if satisfied with the reduced cost.

Fitch Solutions also noted that the upcoming Bandar Malaysia project would house the northern terminus of the HSR, pointing to a likely revival.

In addition to this, the research house cited the subdued economic outlook, compounded by the outbreak of the new coronavirus as supporting factors.

It noted that the government has been mulling stimulus packages, and said this could include additional budget to support the HSR project.

“Even if that is absent, the revival of the project will bring about a heightened level of foreign direct investment as well as construction activity, which could both feed through to economic growth, ” it said.

In the event the project is eventually revived, Fitch Solutions anticipates strong bids from Japan and China, as the two countries continued to compete with each other for large-scale infrastructure projects abroad.

“With a number of countries beginning to explore the option of constructing their first HSR lines, or have already embarked on their first projects, we have observed a high level of interest from both Japan and China as they seek to export HSR technology and equipment, ” it added.

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