Politics won't derail rail deal

THE high-speed rail link between Malaysia and Singapore is likely to proceed despite the political power play in Malaysia, say analysts here.

On Tuesday, the two prime ministers said the original target date of 2020 would be pushed back due to the project's complexity. A new date will be announced after both sides agree on all major issues of the project by the end of this year.

Prime Minister Najib Razak must win the next two general elections if he is to personally see through the project.

But recent political manoeuvring within the ruling Umno party as well as former prime minister Mahathir Mohamad's continued attacks against Datuk Seri Najib have left some party insiders wondering if he can hold on to power beyond this year.

Mr Wan Saiful Wan Jan, head of policy think- tank Ideas, said the high-speed rail project goes beyond political partisanship but he warned that there could be further delays in the future.

"If the deal is signed now or very soon, then whoever takes over will have an obligation to respect the agreement," he said.

"But the rail network is for the benefit of Malaysia in the long term and the benefits will remain regardless of who is in power. So I doubt that any change at the top, if there is one, will have too negative an impact."

Mr Lim Teck Ghee, director of the Centre for Policy Initiatives, was also dismissive of rumours of any change of leadership. He too stressed that any change in leadership would not affect the project.

"If a new leader does emerge, he will want to assert his authority; and all mega projects associated with the previous prime minister will undergo scrutiny. By then perhaps the high-speed project may have gone too far ahead to be abandoned."

Mr Lim warned of possible cost increases because "a great majority" of mega projects in the country have had cost overruns.

Malaysia and Singapore agreed in 2013 to build a high-speed rail link that will slash travel time between Kuala Lumpur and Singapore to just 90 minutes, a project their leaders dubbed a "game changer". The journey between the two cities currently takes, on average, eight hours by train, five hours by bus, four hours by car or 40 minutes by air.

The line, which is expected to have eight stops, will start from Bandar Malaysia, 3km from Kuala Lumpur's financial district, and end in Jurong East.

The Business Times reported last month that the massive project may miss its 2020 deadline by two years and end up costing as much as $14.9 billion.

Mega projects in Malaysia have a history of huge cost overruns. One of these was the Port Klang Free Zone (PKFZ). Its original cost of nearly RM2 billion soared to RM4.6 billion by the time it was completed in 2006. In 2009, an audit by PricewaterhouseCoopers found that the total cost of PKFZ, including interest from debt repayments, could reach RM12.5 billion.

Another was low-cost air terminal KLIA2, which opened a year ago after a three-year delay. Construction costs ballooned from the initial RM1.7 billion to RM4 billion (S$1.5 billion).

Political analyst Khoo Kay Peng reiterated the importance of the high-speed rail link in spurring and creating business opportunities in cities and towns along its route.

"The benefit the rail link can bring would be a lot more than what Malaysians can imagine...

"The project will stimulate economic activity in second-tier cities that have not been enjoying any tremendous growth in the last two decades. The connectivity is going to make it possible for people to create businesses in places like Ipoh and elsewhere."

asruls@sph.com.sg

This article was first published on May 8, 2015.
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