RM70B COST FOR HSR PROJECT?

But progress may stall as the 3 shortlisted consortia are seeking govt financial support

THE cost of the proposed Kuala Lumpur-Singapore high-speed rail (HSR) project may come in at about RM70 billion, said market insiders, adding that this is 30 to 35 per cent lower that the previously reported RM110 billion.

“No definitive cost estimate has ever been provided for the HSR project. The RM70 billion figure is a projection based on factors such as the length and alignment of the railway line, as well as the number of trains and stations required,” said an insider.

MyHSR Corporation, the government-owned entity overseeing the HSR projects development, received concept proposals from seven domestic and international consortia by the Jan 15 deadline.

The request for information (RFI) was to enable the government to assess the private sector’s ability to fully finance the project without state funding or guarantees.

The three shortlisted consortia — YTL Construction Sdn BhdSIPP Rail Sdn Bhd; Malaysian Resources Corp Bhd-IJM Construction Sdn Bhd-Berjaya Rail Sdn Bhd-Keretapi Tanah Melayu Bhd (MRCB-IJM-BRail-KTMB), and a Chinese consortium led by stateowned China Railway Construction — are said to be seeking some form of government financial support.

The MRCB-IJM-BRail-KTMB consortium has reportedly requested in its proposal for government compensate if the number of passengers falls below a minimum threshold.

The YTL-led group has requested for some form of government financial support in its bid to manage the mounting costs of building the line.

"This contradicts the government’s stance that it will not fund the proposed 350km line,” said the insider.

“Of the shortlisted consortia, only the China Railway-led consortium possesses robust finances to undertake the project via private funding.”

Sunway University Business School Economics Prof Dr Yeah Kim Leng said the mega rail project was edging closer to reality with MyHSR shortlisting the three consortia.

However, he cautioned that numerous obstacles must be overcome before the project could commence, including clarifying the funding sources, assessing the project’s feasibility, and determining the extent of government support.

Yeah stressed that if the economic viability and financing challenges were resolved, the project could significantly benefit the Malaysian economy by the end of the decade.

Transport Minister Anthony Loke said early this month the concession method used for private companies to build highways could be adopted.

He said the HSR remained an integral project that could be an game changer for the country.

“I don’t see why we must say no, but it should not be a government-led

I don’t see why we must say no, but it should not be a government-led project. Instead, the private sector can contribute capital and carry on the project. ANTHONY LOKE Transport Minister

project. Instead, the private sector can contribute capital and carry on the project,” he said during the Keluar Sekejap podcast with Khairy Jamaluddin and Shahril Hamdan on April 5.

The project, first mooted by YTL Group more than 20 years ago, resulted in a legally binding agreement in December 2016, with the aim of having the line operational by 2026.

However, it was put on the back burner following several delays at Malaysia’s request and eventually lapsed in December 2020.

KGV International Property Consultants executive director Samuel Tan said on the surface, it appeared that only the Chinese consortium possessed the financial capacity to undertake this massive project.

“Whatever the case, the HSR project, when operational, will transform the entire transportation landscape in Malaysia. The country will be part of the big jigsaw within the Pan Asian Railway Network,” he added.