PETALING JAYA: The current fiscal and economic conditions that are marred by uncertainties have forced a rethink of the Kuala Lumpur-Singapore high speed rail (HSR) project.
This eventually led to the termination of the mega project as both countries failed to reach an agreement, but in the eyes of economists and experts, it may very well be a blessing in disguise
Universiti Kuala Lumpur Malaysia Italy Design Institute (UniKL MIDI) dean Dr Azman Senin said the timing was right for Malaysia to review such a huge commitment, adding that a post-pandemic study should be conducted on all railway projects and possibly, a rethink and redesign.
Azman, who is also the UniKL Asia Rail director, said there was a need to ensure all railway networks would provide good connectivity and mobility experience to the passengers and the government can also consider the integration between the Express Rail Link (ERL), East Coast Rail Link (ECRL) and the KTM.
“We need to re-establish our master plan to revive our economic activities. We remain strong in sectors such as oil and gas, palm oil, healthcare, retail, banking, infrastructure including railway just to name a few.
“But the rapid introduction and development of new technologies are affecting our economic activities dramatically.
“With a revised master plan, we will be able to see the importance and contribution of railway projects, such as the study on HSR towards our economic development and supply chain, ” he told StarBiz.
In June last year, the changes proposed by Malaysia for the HSR project was premised on three key parameters – the recognition of the tremendous socio-economic benefit and catalytic developmental impact brought about by the project, the fundamental need to reduce the project cost and to maintain the 90 minutes express travel time between Malaysia and Singapore.
From a technical perspective, the proposed changes include making the HSR stations functional and doing away with the iconic and expensive designs, improving the alignment to avoid challenging terrains such as the peat soil on the west coast of Johor and also to phase the construction according to demand.
There was also a proposal to integrate the HSR with KLIA to allow it to grow as a global connectivity hub and to expand Malaysia’s domestic transportation network through a connection to Singapore.
All in, the proposed changes could have reduced the overall project cost by 30%, covering charges in alignment, station design, track sharing and the removal of AssetsCo, an entity originally proposed to govern the procurement and operations of the bilateral project
The government could also avoid providing a government guarantee of RM60bil over a duration of 30 years.
It also wanted to bring the construction timeline forward by around two years, to help spur the development of the economy and to revive industries as the country heals from the impact of Covid-19.
“It is a good move to leverage existing infrastructure, not only for cost reduction but also to optimise the usage of railway assets and monetising the asset too.
“Again, we need to ensure the rail connectivity with existing rail networks and future rail networks such as ECRL and rapid transit system. It is a standard in European countries where each country has its own railway networks including signalling, electrifications and track while they have multiple operators running and sharing the railway networks, ” said Azman.
PwC Malaysia economics and policy deals partner Patrick Tay said the original proposal of dedicated infrastructure worked well but at a significant cost while leveraging infrastructure would reduce the cost but has different trade-offs and challenges to resolve.
“Bringing forward the construction timeline at lower costs would bring significant short and long term stimulus to our economy.
“In the short-term, starting up the HSR physical development will inject a large sum of fiscal stimulus into the economy. It will create a lot of work, initially for engineering and planning consultants, then for those in the construction and rail industry, ” he said.
Tay added that as physical construction took place, it will create a lot of economic activities along the entire corridor, benefiting various townships across Selangor, Negri Sembilan, Melaka and Johor.
In the long run, he said significantly improving rail connectivity on the corridor will boost the accessibility of businesses and the people within the corridor, Kuala Lumpur and Johor.
“This would lift the attractiveness of the corridor as an investment destination.
“It will also likely result in improved economic activity along the corridor such as increased trips between cities, social in the form of increased links between communities and environmental benefits, from reduced carbon footprint per passenger kilometer travelled, ” Tay said.