Malaysia says high-speed rail project will only proceed if funded by private sector
Malaysia’s Transport Minister Anthony Loke recently reiterated the Government’s stance on the Kuala Lumpur-Singapore high-speed rail (HSR) project, pointing out that it will only continue if the private sector funds the project.
This is to prevent the state from being burdened with more debt.
Plans for the long-anticipated link have been postponed and derailed several times over the past decade.
It was terminated in January 2021 after both countries failed to reach an agreement on changes proposed by Malaysia, according to The Straits Times.
In July 2023, the Malaysian Government announced that it is open to reviving the project.
Decision was made to prevent high-debt ratio
Delivering a speech in Kowloon Shangri-La, Hong Kong last Thursday (6 June), Mr Loke stressed that he wants to avoid ending up with “a huge financial obligation”.
Source: South China Morning Post
Particularly, he pointed out that high-debt ratio is an issue plaguing the Government. “We intend to reduce this debt,” he said.
Hence, they hope that the private sector will come forward and take the lead to fund mega infrastructure projects such as the high-speed rail link to the Lion City.
He also added that it has to be a sustainable model.
According to South China Morning Post, the project has been estimated to cost up to S$28.8 billion (100 billion ringgit).
Japanese firms reportedly pulled out of project due to lack of funding from Malaysian government
Moreover, Kyodo News reported earlier this year that some Japanese firms have since pulled out of the project.
Initially, the firms had wanted to use Japan’s shinkansen bullet train system as inspiration for the link.
The news site reported that the firms’ felt it was too risky to go ahead without financial support from the Malaysian Government.
Calling the claims “inaccurate”, Mr Loke asserted that the country had not initiated a tender process yet.
Agreement to build high-speed rail link was made in 2013
Malaysia and Singapore first agreed to construct the 350km rail link back in 2013, which was projected to reduce travel time between Kuala Lumpur (KL) to Singapore to 90 minutes.
This is compared to more than four hours by car.
Source: Khaw Boon Wan on Facebook
A Memorandum of Understanding regarding the project was also signed between both countries in 2016.
On 31 December 2020, however, the agreement lapsed as both sides could not come to a compromise.
In 2022, Malaysia expressed hopes to continue working on the project with Singapore again. In July 2023, it was reported that the Malaysian Government called for proposals to assess how feasible a public-private partnership will be.
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Featured image adapted from South China Morning Post and Khaw Boon Wan on Facebook.
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