KL-Singapore HSR postponed: A boost for bilateral ties, but not all is ‘win-win’

KL-Singapore HSR postponed: A boost for bilateral ties, but not all is ‘win-win’

SINGAPORE,. Experts and observers who spoke to TODAY unanimously agreed that the pact to defer the Kuala Lumpur-Singapore High Speed Rail (HSR) project was a good outcome for bilateral relations, but they were divided on whether the postponement was a “win-win” for both countries, as Malaysian Economic Affairs minister Datuk Seri Azmin Ali put it.

Terence Fan, transport analyst from the Singapore Management University, said that both parties came out “stronger”, especially in terms of bilateral ties, after Wednesday’s agreement. “I think Singapore would be a little bit too cold-hearted if it does not make any allowances to help Malaysia.”

By agreeing to a deferment, “Singapore is keeping Malaysia as a party still committed in developing the rail project, so I think it’s a big win for both sides”, he added.

The alternative, Fan said, would be that “Malaysia would try to walk away and try to give Singapore the (full compensation) which could amount to RM500 million”, a sum mentioned by Malaysian prime minister Mahathir Mohamad.

“I think if you look at the long term, 10 to 15 years after the HSR is built, I think the benefits to both countries is a lot more than that,” he added.

Similarly, Member of Parliament Cedric Foo, who formerly chaired the Government Parliamentary Committee for Transport, said that “between two close neighbours” who are “in a long-term partnership”, “one cannot ignore the needs of the other”, and the latest agreement was a “good start to better bilateral relations with the new Malaysian government.

“The premise of (having the HSR) in the first place is to bring both countries closer together. (So) when the new government took over and they had to re-examine their fiscal position, reset their priorities, this is something that we should not turn a deaf ear to,” Foo said.

“Ideally, of course, we would like to have started promptly from the first agreement… (but now) at least there is clarity and a commitment on both sides to bring the project forward, which in the long term will be beneficial for both countries,” he added.

“If your fate is tied, one does not (mind) the nickel and dime.”

Azmin yesterday lauded the agreement as a “win-win” for both countries, after revealing that he had appealed at first for a deferment period of three to four years.

In his opening remarks at a press conference in Putrajaya after signing the agreement to defer the project, he said: “Without doubt, this agreement would not have happened without the strong commitment to bilateral co-operation between the two countries.”

More time to plan

Some analysts said that it was a win for both sides because both Malaysia and Singapore will get more time to develop the regions through which the rail project is expected to run.

Tham Chen Munn, director of business development at PTV Group, a transport solutions software company, said that the deferment period of two years will give Malaysia “time to sketch out their master plans for regions around the stations on the line, so that Malaysia can maximise the economic benefits when the rail is up and running”.

For Singapore, while it already has a good blueprint for the Jurong Lake District, the delay of two years was still “manageable” as it would also take some time to build and develop the region, slated to be the largest commercial hub outside the Central Business District.

Tham said: “The two years would give Singapore more time to build infrastructure, manpower, and the workforce to populate and rejuvenate the area, before the HSR is up.”

Fan said that the two years may also give Malaysia time to “get back on the project”.

“Till now, it is not clear whether they have been doing what they’re supposed to do on their end of the project. (Especially) with the recent general election and reshuffling of the Cabinet, getting things started again will take some time,” he said.

Short-term losses, opportunity costs

Other analysts, however, pointed out that while the deferment gives both sides “more room and breathing space”, it is clear that significant losses will be incurred — mainly by Singapore — in terms of “sunk project costs”.

“There will definitely be short-term losses for Singapore,” Fan said. These include payments to contractors and builders who have been “engaged, and asked to drop what they are doing”.

Lee Der Horng, transport researcher at National University of Singapore, said that there will also be great “opportunity cost”.

“The Government had already spent millions in preparation, they have done feasibility and engineering studies in relation to the HSR, and even acquired land. Now that the project will be postponed, the land will sit idle and upkeeping costs will be incurred,” Lee said.

One example is the acquisition of the 143ha Raffles Country Club and the Jurong Country Club for the construction of the rail line.

Lee said: “At the end of the day, the HSR would be beneficial to two countries, so to get it done earlier would, of course, be better than later. In that sense, any delay is a lose-lose.” ? TODAY