Dynamics of High Speed Rail project has changed

Malaysian Prime Minister Najib Razak and Singapore Prime Minister Lee Hsien Loong at the joint press conference on 5 May 2015, to announce that the terminal in Singapore for the high speed rail link to Kuala Lumpur will be in Jurong East.

WHEN the concept of a High Speed Rail (HSR) between Malaysia and Singapore was mooted, people thought of speedier travel times and ease of connectivity between Kuala Lumpur and Singapore.

As details of the project were fleshed out, more stops along the way to Singapore was planned. The idea was that the HSR would not only serve to shuttle people between the two countries but also serve as an economic catalyst along the way in places such as Seremban, Malacca, Muar, Batu Pahat and Nusajaya.

The idea was that the HSR rail would drive economic activity and development in those cities like how other cities in the world connected with a HSR has benefited.

But the project so far has been met with a number of hurdles.

The termination point in Kuala Lumpur will be at Bandar Malaysia but the development of that project will only start once 1Malaysia Development Bhd finishes building a new airbase for the air force in Negeri Sembilan. Construction at Bandar Malaysia is expected to start in 2017.

It was also revealed that the termination point in Singapore will be in Jurong East, which alters the attraction of using the HSR to get to Singapore.

Both leaders from Malaysia and Singapore in a meeting recently decided that the project will be reassessed but those present say that the expensive project will likely go ahead.

There are a number of issues that need to be tackled as the feasibility of the project is altered from Malaysia's perspective after Jurong East was picked as the termination point as opposed to the city centre.

The first is the attraction of using the HSR to get to Singapore. Right now, Jurong East is a mix of industrial and residential buildings. Singapore intends to turn the place into a second business hub to get companies to move away from the city centre.

That, unfortunately, will take time. And until the migration plans bear fruit, Jurong East will remain what it is. Reports indicate that the residents approve of the project but from Malaysia's perspective, getting out at Jurong East will mean another lengthy time to travel to the spots in Singapore that are attractive to foreigners.

Jurong East is in the west coast of Singapore and although there is a Mass Rapid Transit (MRT) station there, it will take sometime for passengers to reach the city centre of Singapore where much of the tourist activity takes place.

Singapore will improve of the MRT linkages at Jurong East to the centre of the country but spending an additional hour or so after whizzing on a train for 90 minutes to get to Singapore dilutes the attractiveness of using the HSR to get to Singapore.

The the other aspect is the cost of building the HSR. It's been reported that the cost will be divided depending on the geographical location of where the infrastructre will be but given that the dynamics of the project has changed with the location of the termination point in a less attractive area, maybe both Malaysia and Singapore need to figure out just how to be more equitable in sharing the development cost of the project.

Much more of the infrastructure will be on Malaysian soil but the benefits are skewed differently now. It's maybe more appropriate if Singapore shares a bigger share of the contruction cost as the location of the HSR will add to the pull factor in helping to turn Jurong East into a business hub.

The cost of the project will be astronomical. Its been reported that it can be around RM40bil and if Malaysia has to bear about RM30bil of that, then it will put a strain on the viability from malaysia's perspective.

Even if the costs are shares equitably, given that the business hub will still be in development assuming that the HSR kicks off a few years after 2020, it could well mean that without proper traction from Singapore's side, ridership might likely be poor in the initial years.

That will mean that up to the point when the business hub in Jurong East is developed, the company the operates the HSR will likely find it a strain to pay off the massive debts that it take on to build the project and to operate the service.

From Malaysia's perspective, having the stops along the route will aid in the development of those areas. But if the operator of the HSR need to charge a high price for a ticket to recoup costs, then those aspirations will be tough to materialise.

It appears that the project will face hugh obstacles in getting it to work. But it is long-term project where the benefits will, maybe, be realised a long time after the project is built.

With that in mind, one has to wonder just how much can Malaysia and Singapore need to stomach before it reaps the rewards of the HSR project.