This article first appeared in The Edge Malaysia Weekly on March 27, 2023 - April 2, 2023

THE federal government has had meetings with several parties in the private sector to gauge their interest in pursuing the Kuala Lumpur-Singapore high-speed rail (HSR), a mega project that was said to cost about RM60 billion in 2020, say sources.

It is understood that five companies were invited for a meeting with two government agencies recently. The invited parties were Tan Sri Syed Mokhtar Albukhary-controlled MMC Corp Bhd, Tan Sri Desmond Lim Siew Choon-controlled WCT Holdings Bhd, YTL Group, Tan Sri Vincent Tan Chee Yioun-controlled Berjaya Group Bhd and Malaysian Resources Corp Bhd (MRCB).

Interestingly, Gamuda Bhd — which has undertaken most of the mega infrastructure projects in the country — was not on the list of companies that met with the government agencies.

An executive of a company that met with the government agencies, however, thinks that it is only as a matter of time before Gamuda and other construction giants, such as IJM Corp Bhd and Sunway Construction Group Bhd, have a tête-à-tête with the government agencies regarding the HSR project.

While executives of MyHSR Corp Sdn Bhd were present at the meetings, it is uncertain which ministries were involved in the talks. MyHSR Corp is wholly owned by Minister of Finance Inc but comes under the supervision of the Ministry of Transport, serving as the government’s project delivery vehicle. Transport Minister Anthony Loke Siew Fook did not respond to a query sent to him on the matter.

Speaking at the Invest Malaysia Conference on March 8, Loke told the audience that the government was open to suggestions of reviving the KL-Singapore HSR project if it did not have to fund it. “The prime minister gave me a very clear instruction ... we have no problem implementing that [HSR] project, but it must be a private sector project,” he said in response to a question from the audience.

A source tells The Edge that the meetings show the government is initiating a request for information, or an RFI. “Yes, there have been a number of meetings with different players to gauge the potential of getting the HSR done, but this exercise is just to get input from the players and give them information in order to get good proposals from them [construction players].”

The scope of the project includes the regulatory compliance and advanced works, land acquisition, design and build requisite civil works, design and build system and rolling stock, and maintenance and operation of the HSR system.

The Edge understands that after the RFI phase and an evaluation of the conceptual proposal, a detailed feasibility study will be undertaken.

According to one of the players who attended the meeting, the salient features being sought are a design speed of 350kph, the concessional structure being a design-finance-build-operate-transfer (DFBOT) method, and without any government funding or guarantees. It was also clearly stated that the conceptual proposal submitted would not be binding on the government.

The meeting with industry players will enable the government to gather essential information to determine the feasibility and viability of the project, says the source.

According to executives familiar with the goings on, the government has divided the HSR construction into several segments, including the technical perspective involving the proposed route, the track alignment and stations, and specifications such as the project timeline and details on the rolling stock and signalling systems. Another segment involves the breakdown of the project costs, including land acquisition, operating expenses, funding sources and structure.

The government is looking to the five construction companies to explain their business models and revenue streams, demand and pricing strategies, and the legal and regulatory support required from the government. It is also exploring the possibility of forming consortiums and the structures with the varying roles of the companies involved in the project.

Coincidentally, the meetings took place at about the same time as Singapore President Halimah Yacob’s three-day visit to Malaysia last week, when she met with Yang di-Pertuan Agong Al-Sultan Abdullah Ri’ayatuddin Al-Mustafa Billah Shah and Prime Minister Datuk Seri Anwar Ibrahim.

Among the many issues discussed, Halimah is reported to have mentioned that more than one million Singaporeans travel to Malaysia each month through the land checkpoints, and that the Johor Baru-Singapore Rapid Transit System (RTS) Link, which is slated for completion by 2026, would strengthen the connectivity between the two neighbours. It is unclear whether the construction of the HSR was discussed.

Prior to the three-day visit, Anwar and his entourage had visited Singapore in February. That was his first official visit to the republic after he became prime minister.

Plans for a HSR linking the two capital cities were mooted back in 2010 for the development of Greater KL when Datuk Seri Najib Razak was the prime minister.

Indeed, the merits of the rail project have been subjects of debate since day one.

Among the concerns have been that the HSR service would affect the passenger loads of flights between the two cities, which is one the most profitable routes in the region, with some arguing that the convenient rail service would speed up the brain drain to Singapore. With the HSR, it would take 90 minutes to travel from KL to Singapore.

The progress of the project gained traction in 2016 when foreign parties, including infrastructure builders from China and Japan, indicated their interest in participating. The cost was said to be RM110 billion then.

The Chinese authorities have seen the rail project as part of their Belt and Road Initiative, in addition to the East Coast Rail Link (ECRL), which is currently under construction. The ECRL connects Port Klang on the west coast of Peninsular Malaysia to Kuantan on the east coast and further north to Kota Baru and Tumpat.

Interestingly, Anwar is slated to meet Chinese President Xi Jinping and Premier Li Qiang during his official visit to China on March 29. A HSR linking KL and Singapore could be a possible topic of discussion.

In April 2019, when then premier Tun Dr Mahathir Mohamad made a trip to Beijing and met up with Chinese leaders, Xi included, the ECRL and Bandar Malaysia plans were revived. However, the Bandar Malaysia development faced issues related to funding and did not progress.

In May 2018, a 50:50 Gamuda Bhd-MRCB consortium known as MRCB Gamuda Consortium was appointed the project delivery partner (PDP) for the northern package of the HSR, from Kuala Lumpur to the state border between Melaka and Johor.

Meanwhile, a consortium comprising YTL Corp and pilgrims’ fund Lembaga Tabung Haji was awarded the PDP role for the southern section, which would stretch from the southern side of the Melaka station to the Malaysia-Singapore border.

When the Pakatan Harapan coalition took control of Putrajaya in 2018, it suspended the HSR project in view of the government’s tight fiscal condition and ballooning national debt.

The project was terminated in January 2021 by then prime minister Tan Sri Muhyiddin Yassin, as the two countries could not reach an agreement on several changes that the Malaysian government had proposed.

One of the changes requested by the Malaysian government was to have the HSR linked to the Kuala Lumpur International Airport (KLIA), as this would help boost traffic to KLIA. The initial plan was to have the terminal at Bandar Malaysia — the former air force base near Sungai Besi in KL. Nonetheless, the massive real estate development has been cancelled given the glut of office buildings in the capital city.

The termination of the HSR project resulted in Malaysia having to pay RM320.27 million in compensation “for costs incurred for the development of the HSR project, and in relation to the extension of suspension of project”, a press release by the Economic Planning Unit of the Prime Minister’s Department said back then.

The Singapore government, however, seems to have gone ahead and prepared for the rail project despite the uncertainties across the Causeway. The Singapore Land Authority has acquired two golf clubs, namely Jurong Country Club and Raffles Country Club, for the project.

Singapore Prime Minister Lee Hsien Loong revealed that the terminus for the HSR link to KL would be in the Jurong Lake District in Jurong East. He then said this would dovetail with plans to develop Jurong East into a second central business district.

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