Malaysia’s High-Speed Rail Project Gains Momentum Amid Hopes for China Extension

• 27 August 2024
• Construction Focus
• 780 Views

Malaysia’s long-anticipated High-Speed Rail (HSR) project, linking Kuala Lumpur and Singapore, is gaining traction with the potential to extend the line to China, which could significantly enhance its economic viability. The project, which is estimated to cost between USD 15.7 billion and USD 18 billion, represents a significant reduction from the original USD 24.7 billion projection. However, these figures are still preliminary and subject to refinement based on factors such as railway alignment and infrastructure requirements, according to NST ​dated 07 August 2024.

The Malaysian government, under Prime Minister Datuk Seri Anwar Ibrahim, is currently evaluating proposals from shortlisted private consortiums and aims to decide on the project’s future by the end of the fourth quarter of 2024.

Dr. Yeah Kim Leng, a professor of economics at Sunway University Business School, emphasised that “Singapore’s involvement is crucial for the success of the project, noting that the rail link to China via Thailand is already under consideration, utilizing existing railway infrastructure. This development positions the HSR as a vital component of the broader Pan Asian Railway Network, with far-reaching economic implications.”

Dr. Yeah highlighted that the high-speed Asian rail network is gradually materializing, with projects in Laos already completed and both Thailand and Vietnam actively pursuing their own high-speed rail initiatives. Samuel Tan, a senior consultant, underscored the transformative potential of the KL-Singapore HSR project on Malaysia’s transportation and property landscape.

He noted that “this could establish Malaysia as a key hub in the Pan Asian Railway Network, linking Southeast Asia to China and Europe, thereby attracting more investors due to improved rail connectivity.”

Transport Minister Anthony Loke Siew Fook expressed optimism that negotiations with Singapore would commence once a policy decision is made. MyHSR Corporation, responsible for the project’s development, received concept proposals from seven local and international consortia earlier this year, with three being shortlisted. These include consortiums led by YTL Construction Sdn Bhd, Berjaya Rail Sdn Bhd, and a Chinese state-owned enterprise, China Railway Construction.

The Malaysian government is committed to ensuring that the HSR project is managed by a consortium with at least 51% Malaysian ownership, reflecting its strategic importance. The project, initially proposed over 20 years ago by YTL Group at an estimated cost of USD 1.7 billion, was delayed and eventually lapsed in December 2020, resulting in Malaysia paying over USD 75 million in compensation to Singapore.

The renewed focus on the HSR project follows the 2022 general elections and Prime Minister Anwar’s diplomatic engagements with Singapore. Dr. Ahmed Razman Abdul Latif, an associate professor at Putra Business School, highlighted the economic benefits of the HSR in enhancing the movement of human capital within ASEAN.

However, he cautioned that “the project’s high cost remains a significant hurdle, alongside governance issues related to the management and operation of critical national assets.”

As the Malaysian government weighs its options, the potential extension of the HSR line to China could unlock new economic opportunities, further cementing Southeast Asia’s position as a critical node in the global transportation network.

• Road and Infrastructure