KL-Singapore rail link may miss 2020 deadline by two years

Keen travellers from both sides of the Causeway may have to wait a little longer for the multibillion-dollar high-speed rail link between Kuala Lumpur and Singapore as the project could be up and running some two years later than its original 2020 target.

According to sources, 2022 may now be a more realistic deadline for the completion of the mammoth project estimated to cost nearly RM40 billion (S$14.9 billion) as there are many "big moving parts" that have yet to be ironed out, rendering the 2020 deadline a tad too ambitious.

"This (the delay) is not necessarily a bad thing. It's a huge project. More time is needed to sort some aspects out so that it can take off smoothly," a source close to the project told The Business Times.

It is also understood that the engineering, procurement and construction (EPC) contract for the project - dubbed a "game changer" as it will cut travel time between Kuala Lumpur to Singapore to 90 minutes - may be awarded on a negotiated basis, although a firm decision on this has yet to be made.

The high-speed rail project was first mooted in 2013 at a retreat in Singapore by the leaders from both countries - Singapore Prime Minister Lee Hsien Loong and his Malaysian counterpart Najib Razak. Last year, when asked if there was a need to push back the 2020 target, Mr Najib had replied that it was too early to do so as "it (the project) was designed to be ambitious to begin with".

Mr Lee is set to host Mr Najib at the next Leaders' Retreat here on May 5, where many expect more details to be forthcoming on the mega project aimed at improving connectivity between both countries, and meeting the growing demand for an alternative mode of transport given the traffic congestion on the Causeway.

Despite signs that the high-level project may be somewhat delayed - it was earlier reported that construction could start in the third quarter of this year but now, sources say it may happen only closer to year-end or even in early 2016 - some crucial elements appear to be taking shape.

For one thing, just over a week ago the Malaysian Cabinet approved the high-speed rail project and the establishment of MyHSR Corp Sdn Bhd, a unit under the Ministry of Finance (MOF) tasked with undertaking the project.

It was reported by the Malaysian press that the MOF will invest in 10 million shares of MyHSR for RM1 per share as an "initial investment".

Last week, Mohd Nur Kamal, chief executive of Malaysia's Land Public Transport Commission, told Malaysia's The Star daily that the project could see Malaysia forking out more in terms of cost than Singapore as a bigger portion of the 340km rail link spans the Malaysian side.

He said the mobile infrastructure cost - such as rolling stock and system works - to be borne by Malaysia and Singapore would be determined based on the geographical span of the rail link.

Mr Nur Kamal said that the overall plan was still being finalised and that details of the bilateral agreement between Malaysia and Singapore on the project - these include design, financing, governance, operations, security and immigration issues - are expected to be finalised by the third quarter, an important milestone to kickstart the project.

This giant rail project, touted as one of South-east Asia's largest infrastructure projects, has already drawn great interest from construction and infrastructure stalwarts with firms from China and Japan pulling out all the stops for a big slice of the action.

In March, Japanese Prime Minister Shinzo Abe led high-level talks with Malaysia to convey Japan's interest to partake in the proposed project. Working in Japan's favour are its reputation and track record as a pioneer in high-speed rail technology.

Its Shinkansen bullet train network, the world's first system of bullet trains developed in the 1950s and 1960s, has commendable safety and reliability records. Just this week, it scored big at a test run of its "maglev" (short for magnetic and levitation) train when the state-of-the-art train seized the world speed record clocking in 603kmh.

China, which boasts of having the world's largest high-speed rail network, is also widely known to be feverishly lobbying to participate in the project.

"China is throwing in everything to land the project. It's going to be a tough match," said the source.

This article was first published on April 27, 2015.
Get The Business Times for more stories.