Malaysia's on-off relationship with the KL-Singapore High Speed Rail

By Vincent Tan

There were talks of resurrection mere months after it was cancelled in 2021. But news of a potential revival of the Kuala Lumpur-Singapore High Speed Rail (HSR) project really gained traction following Malaysian prime minister Anwar Ibrahim's visit to Singapore in January this year.

Essentially, the message by government ministers on both sides of the Causeway over the past few months appears to be that there is a willingness to resume negotiations on a "clean slate".

However, at least as far as Malaysia is concerned, funding would have to come from the private sector.

And then, of course, there is concern that some of the problems that scuppered the deal the last time could potentially reappear.

Past issues

Malaysia and Singapore had originally inked agreements for the HSR in December 2016, back when Najib Razak was prime minister.

Spanning 350km, the rail line was aimed at reducing travel time between Kuala Lumpur and Singapore to just 90 minutes.

However, the project was suspended for two years following a change of government in Malaysia in 2018, then deferred a further seven months, and eventually terminated when the two sides failed to agree to new terms at the end of 2020.

One key source of contention that had led to the cancellation had been the status of AssetsCo, the putative asset management company that was to be jointly managed by and answerable equally to both Malaysia and Singapore.

And as far as Malaysia tells it, the concern was one of sovereignty, and that Singapore would have had a strategic role in Malaysia's railway development if AssetsCo had facilitated the project. This is despite 96 per cent of the line being in Malaysian territory.

"The sovereignty issues are complex, as they can arise from various contexts such as territorial disputes, political autonomy or control over resources," explains Nik Ibtishamiah Ibrahim, a research officer at Universiti Malaya's Centre for Transport Research (CTR).

Referring to previous issues tied to rail lines, such as the transfer of the old Malayan Railways (KTM) line, which ran for 30km through Singaporean territory, and the station at Tanjung Pagar to Singaporean control, the researcher said that any new negotiations would require careful consideration and diplomacy.

The problem is that there is no one-size fits all solution. And added to that is the very real possibility of old issues cropping up.

Dr Oh Ei Sun, a senior fellow at the Singapore Institute of International Affairs, however, is optimistic, noting that there is goodwill as Malaysia had been willing to compensate Singapore for the termination of the project back in 2021.

"(Additionally) there is a huge demand for the HSR, as the Singapore-KL corridor is one of the most congested in the world, both by air and by road. So, the HSR will help alleviate this congestion and thereby facilitate more business dealings," he said.

No public funds

But with the Malaysian government appearing reluctant to part with more public money, could the new proposed endeavour be entirely paid for by the private sector?

Dr Yuen Choon Wah, who heads Universiti Malaya's CTR, believes that despite the government's stand, a public-private partnership model could be viable.

There might also be a need to look at different financing models.

"I think any local private company alone may not have the ability to fund such a mega-projects; they may need to form a consortium to do so," he said. "(And) support from the government would be needed for loans."

There are also public-private partnership and revenue-sharing options aplenty, CTR's Nik Ibstishamiah adds, including Build-Operate-Transfer (BOT), Design-Build-Finance-Operate (DBFO) and Build-Own-Operate-Transfer (BOOT) models. As such, funding should not pose an issue.

Returns, however, are a different kettle of fish.

Faster (and cheaper) travel?

The Kuala Lumpur-Singapore flight route is and has been for some time one of the busiest international routes in the world.

Thus, the general assumption is that travel between the Kuala Lumpur International Airport (KLIA) and Singapore's Changi Airport could be affected if the HSR does see the light of day, with many travellers opting to travel by rail instead of air.

However, rapid transit planning consultant Muhammad Zulkarnain Hamzah explains that that would not automatically mean profits for HSR's operator.

Pointing to Spain's Madrid-Barcelona HSR, which cost €10 billion (RM49.4 billion) to build and has an average ridership of 50,000 passengers daily, the consultant says that the proposed KL-Singapore line would have to record approximately 16 million riders yearly to just break even. And that might not be easy.

"As a rule of thumb, HSR projects need to attract 45,000 riders per kilometre per year in order to break even.

"(But) fares will most likely be set at RM0.50 per kilometre, meaning it could cost RM175 one way."

That, Muhammad Zulkarnain says, is too expensive for Malaysians who currently travel by bus or car, especially families.

Even so, CTR's Dr Yuen feels that the HSR line could ease air travel demand, while potentially reducing the burden on Changi Airport to support and provide high-frequency flights between Singapore and Kuala Lumpur.

"However, for Malaysians, the positive impact might not be as big, as Malaysia is considered a middle-income country, and I'm not sure whether the HSR fare could be attractive enough for Malaysian travellers, although the shorter travel time could be a big advantage," he said.

Realignment on the cards?

On the subject of air travel, one other issue that had dogged the cancelled HSR project was Malaysia's request to realign the line to include KLIA and the administrative capital of Putrajaya.

Additionally, the original HSR project had been expanded from a straight route to subsequently include stops in Melaka, Batu Pahat and the-then new development of Iskandar Putri in Johor Bahru.

As such, a fresh rail project might see the respective parties look to re-draw plans on top of making various other tweaks.

Dr Yuen urges caution.

"The most important thing is to keep (the number of stations) as minimal as possible so that the train can travel fast on the Kuala Lumpur-Singapore corridor, as I believe most people will be travelling from Kuala Lumpur to Singapore or vice-versa."

In other words, any realignment of plans and priorities ought to factor in those who are expected to use the rail link — travellers.

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