Terminated HSR project a missed opportunity to boost economic competitiveness for Singapore, KL: Experts
SINGAPORE: The plan was to connect Singapore and Kuala Lumpur - two metropolitan cities in Southeast Asia - by a high-speed rail, revving both economies and propelling each to become a formidable force in the region.
However, this was not to be after the KL-Singapore High-Speed Rail (HSR) project was terminated on New Year’s Day after the agreement to construct it lapsed on Dec 31, 2020.
Malaysia allowed the HSR bilateral agreement to lapse on the deadline after both sides could not agree to changes it had proposed.
The HSR line had aimed to reduce travel time between Singapore and Kuala Lumpur to around 90 minutes by train, from the current 11 hours on existing train services.
Experts interviewed by CNA said the discontinuation of the project was a missed opportunity to boost connectivity between Singapore and Kuala Lumpur, a move which could have transformed their economic competitiveness in the region.
Singapore University of Social Sciences' associate professor of economics Walter Theseira said: “The general point of the HSR was to improve the economic competitiveness of Singapore and Malaysia. Neither economies are particularly large, so both sides stood to benefit from the agglomeration of the economy (the HSR would have brought).”
He explained that a HSR between Singapore and Kuala Lumpur would have brought about more economic growth and development, similar to how Japan benefited from connecting its major cities by Shinkansen.
“Singapore and Kuala Lumpur are not significant in potential compared to cities like Jakarta, Bangkok, or even existing global centres like Tokyo, New York and London and so on. These places benefit from having a much larger city economy, better access to talent. The HSR would have improved this,” added Assoc Prof Theseira.
Dr Francis Hutchinson, who leads the Malaysia programme at the ISEAS-Yusof Ishak Institute, explained that the HSR project could have connected two large cities with quite large populations – some 8 million in Greater KL and 6 million in Singapore.
He noted that the Singapore-KL air route remains one of the most heavily transited in the world, showcasing a “real demand” for travel services between the two cities.
“Shortening the travel time (between Singapore and KL) to 90 minutes compared to four to five hours would have improved efficiency and productivity, particularly for business travellers. This would also unleash demand for additional trips between the two centres,” added Dr Hutchinson.
SINGAPORE BUSINESSES MISS OUT ON FLOW OF HUMAN CAPITAL
Assessing how Singapore would be impacted by HSR termination, transport researcher Terence Fan from the Singapore Management University said the main point would be how the project would have facilitated flow of human capital and passengers.
Dr Fan highlighted that without HSR, benefits of more efficient travel between Singapore and Kuala Lumpur would not have materialised, and this would have impacted business travel in particular.
Assoc Prof Theseira said the HSR would have granted businesses from Singapore more access to Malaysia’s economy.
He said a high speed rail system would have fared better than the current options such as air or land travel, as there would be fewer delays in customs and travel time. Hence, it would be easier for Singapore firms to expand their business reach throughout the cities along the rail line.
“With the HSR, it means that professional services in Singapore can send employees to KL for projects and come back on the same day,” he said.
“For regional businesses, they would have felt comfortable having headquarters in Singapore, or KL, and have staff in the other country. These things would have been much more feasible with HSR,” added Assoc Prof Theseira.
READ: Assets company removal 'main concern' that led to HSR termination, project has cost Singapore more than S$270 million, says Ong Ye Kung
JURONG DEVELOPMENT PLANS SET TO PROCEED
He also pointed out that plans by the Singapore government to develop the Jurong region will likely press ahead, even though the region would no longer host the HSR project’s southern terminus.
“Many of the plans to develop Jurong are not contingent on HSR. HSR would have been a nice bonus, but I do not think there will be a decision to seriously downgrade those plans,” said Assoc Prof Theseira.
The terminus station was set to be built in Jurong East, and would have been accessible by four MRT lines.
Speaking in Parliament on Monday (Jan 4), Singapore Transport Minister Ong Ye Kung said the termination of the HSR project will not affect overall plans for the Jurong Lake District.
He explained that the Singapore Government had started planning to transform Jurong as early as 2008, and the plans were developed before Malaysia proposed the HSR project.
However, Assoc Prof Theseira maintained that there would be some value for Singapore to not rush into redesignating land use in Jurong, and to wait and see if the Malaysia government might decide to go ahead with the project domestically.
In December, there had been reports that Putrajaya might continue the project without Singapore's involvement. Hence, the line - which starts in Kuala Lumpur - could end in Johor in Malaysia instead of Jurong East in Singapore.
Assoc Prof Theseira maintains that Singapore could adopt a “wait and see” approach and decide later on if it wants to join if Malaysia does commence construction.
However, if in the future it is decided that the plans to build HSR are scrapped completely, he said that the Singapore Government could then decide how to redevelop the sites in Jurong.
MALAYSIAN COMMUTERS IN SMALLER CITIES, CONSTRUCTION SECTOR IMPACTED BY HSR CANCELLATION
Meanwhile, the termination of the HSR project is also a missed opportunity for the construction sector in Malaysia, as well as residents who live in cities along the HSR line.
Mr Peck Boon Soon, an economist at RHB Research Institute in Malaysia, told CNA that the HSR would have required around 335km of tracks in Malaysia, tunnels, bridges and other infrastructure and that local construction companies would have benefitted from it.
"During this period where construction for residential and commercial properties are sluggish, the HSR would have been a bonus for civil engineering companies and firms," said Mr Peck.
Dr Hutchinson added that construction work would also have involved train stations at smaller urban cities such as Iskandar Puteri, Muar, Batu Pahat and Seremban.
“In all of these cases, there were ambitious urban development plans that planned to reorient the commercial life, particularly of the smaller cities, which would house commercial and residential dwellings in and around the stations,” he added.
Moreover, residents from these cities have also been impacted as the HSR would have enabled them to do day trips from their homes and Kuala Lumpur or Singapore, Dr Hutchinson said.
“This would really be a game-changer for sectors such as higher education, as universities in the two countries would be able to cater to a wider range of students,” he added.
Reports that Malaysia will now consider going ahead with the project without Singapore’s participation has drawn criticism from many parties, including former Malaysian prime minister Najib Razak.
Najib’s administration was the first to present the idea of a KL-Singapore HSR in 2013, and he later oversaw the signing of the bilateral agreement with Singapore in 2016.
In a Facebook post last Saturday, Najib stressed that Malaysia is set to lose billions of ringgit by terminating the HSR project.
He warned that Singapore’s exclusion from a high-speed rail line will make the project unsustainable, explaining that building the HSR was justified as the benefits from an increase in tourists from Singapore would bring billions in revenue as well as create jobs for the people that will last for a long time.
Mr Peck made a similar point, noting that if the HSR was to exclude Singapore, it would reduce the tourism dollars the project could probably bring in.
"Tourists from Singapore are put off by the congestion at the Causeway and the hassle of air travel. The HSR eliminates this, and would have increased the number of tourists visiting Malaysia from not only Singapore, but also international tourists who want to visit Malaysia after stopping by Singapore," he added.
"The HSR being terminated is certainly ... a missed opportunity to expand Malaysia's tourism network," said Mr Peck.
READ: Malaysia expects compensation for HSR project's termination to be below S$270 million, says Mustapa Mohamed
RTS LINK PROJECT NOT A REPLACEMENT FOR HSR
Although the HSR has been terminated, another rail project between both countries - the Rapid Transit System (RTS) Link project - will go ahead and is set to commence passenger services by end-2026. Will this help mitigate the downsides of terminating the HSR project?
The RTS Link connects Bukit Chagar in Johor Bahru to Woodlands in Singapore, serving about 10,000 passengers per hour each way to help ease traffic congestion on the Causeway.
Speaking in Parliament on Monday, Mr Ong, Singapore’s Transport Minister, said that the RTS Link project was “progressing well”.
"The Johor Bahru side has broken ground. On our side, we will break ground soon and we hope the project and the service can commence in 2026 as scheduled," he added.
Dr Hutchinson told CNA that the RTS would be beneficial in terms of relieving the demand on existing connections between the two countries.
“So, having the RTS, which is slated to move 10,000 people each way per hour, is beneficial for travel and connectivity. The benefits of this connection are that it would be punctual, and not subject to external conditions such as congestion on the Causeway,” said Dr Hutchinson.
“The need for this sort of connection can be seen in the continued demand for the Woodlands-JB Sentral rail link, which is favoured by people needing to get to one side or the other on a specific schedule,” he added.
However, he pointed out that the RTS Link would be “less helpful” for business travellers that need to commute efficiently between KL and Singapore.
Assoc Prof Theseira concurred, pointing out how the RTS would work for those commuting between Singapore and Johor Bahru, but not for those wanting to travel to KL.
“(The RTS) is mainly to ease daily commuting (at the Causeway) and I do not think most Singaporeans would use the RTS as part of a link to get to Kuala Lumpur,” he said.
“Very few Singaporeans would use the RTS to connect to JB before switching over to the KTM rail to travel to Kuala Lumpur. You can do that, but (taking into consideration) the amount of time, its not competitive for business travel as compared to flying,” Assoc Prof Theseira added.
Earlier this week, Putrajaya said it was keen on the HSR project, but the COVID-19 pandemic has forced it to re-evaluate the situation.
There has been talk that the Malaysia government is looking to upgrade the existing national Keretapi Tanah Melayu (KTM) railway network which runs from Johor Bahru to Kuala Lumpur and further north.
RHB's Mr Peck noted that the Malaysian government is considering this option because the combined costs of constructing the RTS and upgrading the KTM is not as expensive as constructing the HSR.
"Travelling from Johor Bahru to Penang for example via the upgraded KTM service may not be as convenient for commuters as compared to HSR. But the difference in costs to develop these two systems are significant for the government," he added.
The speed the KTM service is projected to operate on is around 160km per hour, which pales in comparison with the HSR.
Assoc Prof Theseira opined that the increase in speed for KTM will not be enough for travellers, especially those who commute for business reasons, to consider the RTS and KTM a serious alternative to air travel.
“I don’t see how (riding the RTS and switching to KTM) would be competitive as compared to flying. The HSR was meant to be a superior alternative to flying,” added Assoc Prof Theseira.