KL-SG HSR Project Will Cost 30% Less Than Projected RM110 Billion

According to industry insiders, the Kuala Lumpur-Singapore high-speed train (KL-SG HSR) project will cost roughly RM70 billion, a major reduction from prior forecasts of RM110 billion.

However, it should be noted that no exact cost estimate for the project has been published yet. The RM70 billion amount is an estimate based on several criterias, including the length and alignment of the railway line, as well as the required number of trains and stations.

MyHSR Corporation, the government-owned corporation in charge of the project, received concept proposals from seven consortia by the Jan 15, 2024 deadline. The goal was to assess the private sector's ability to fund the project independently, without the use of public cash or guarantees.

Thus far, three consortiums have been shortlisted, with a couple now seeking some form of government financial support.

Among these shortlisted consortiums are YTL Construction Sdn Bhd-SIPP 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 state-owned China Railway Construction.

According to reports, the MRCB-IJM-BRail-KTMB consortium has asked compensation from the government if the number of passengers falls below a specific threshold. Similarly, the YTL-led group has sought government funding to help handle rising expenditures.

Despite the government's stance against actively supporting the project, the chosen consortia appears to have differing financial capabilities. Only the Chinese consortium seems to have the funds to complete the project through private funding.

Dr. Yeah Kim Leng, an Economics Professor at Sunway University Business School, sees the shortlisting of three consortiums as a step toward completing the project. However, he emphasises the importance of addressing numerous issues, such as financial sources, feasibility assessments, and the level of government support, prior to implementation.

Transport Minister Anthony Loke Siew Fook proposed using a concession mechanism similar to highway building for the HSR, emphasising its potential as an economic stimulus.

The project, which was first proposed more than two decades ago, was delayed and ultimately placed on hold in 2020, with Malaysia compensating Singapore for termination expenses. Revival talks gathered traction after the 2022 general elections, indicating increased interest in the proposal.

Experts regard the KL-SG HSR as a game changer for Malaysia's transportation sector, potentially connecting it to a larger Pan Asian Railway Network and drawing more financial interest.