Japanese firms drop out of Malaysia-Singapore high-speed rail project, Kyodo News reports

Sunday 12 May 2024

KUALA LUMPUR (Jan 12): Japanese firms have decided to drop their plans to get involved in a high-speed rail project connecting Kuala Lumpur and Singapore, government and company sources said on Thursday.

In a report on Friday, Japanese agency Kyodo News, citing sources, said the companies, including East Japan Railway Co, had hoped to utilise Japan's Shinkansen bullet train system in the project but they have decided it will be too risky without the Malaysian government's financial support.

The report said the sources included those at the Japanese and Malaysian governments.

The development could allow rival Chinese businesses to further solidify their footprint in infrastructure building in East Asia after they completed a high-speed railway in 2023 in Indonesia and are currently building another in Thailand.

Kyodo News added that next Monday (Jan 15) is the deadline for submitting a bid.

The Malaysian government started soliciting bids in July 2023.

The project is expected to cost RM100 billion, but the Malaysian government intends to promote it through private financing rather than by government spending or extending debt guarantees.

While Japanese firms are dropping out, several local companies plan to join hands with Chinese and European firms to make bids, the sources said.

The Malaysian government is set to narrow down candidates within several months and will start full-fledged negotiations with the Singaporean government later this year at the earliest.

The Malaysian and Singaporean governments initially reached a basic agreement in 2013 on the project, which called for building a 350km-long high-speed rail link that would cut travel time between Kuala Lumpur and the city-state to just 90 minutes, compared with over four hours by car.

From Japan, East Japan Railway and major trading house Sumitomo Corp showed interest in joining the project. In 2015, then Japanese transport minister Keiichi Ishii pitched the Shinkansen system to Malaysian government officials during a visit to Kuala Lumpur.

In 2021, then prime minister Tan Sri Muhyiddin Yassin cancelled the project due to concern over financial burdens before the current administration of Prime Minister Datuk Seri Anwar Ibrahim officially revived the project.

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