Singapore-KL high-speed rail

Finance and cost issues to be ironed out

Here's what you need to know about the Kuala Lumpur - Singapore High Speed Railway.
The national flags of Singapore and Malaysia displayed for the signing of the high-speed rail memorandum of understanding at the Malaysian Prime Minister's official residence in Putrajaya yesterday.
The national flags of Singapore and Malaysia displayed for the signing of the high-speed rail memorandum of understanding at the Malaysian Prime Minister's official residence in Putrajaya yesterday.ST PHOTO: MARK CHEONG

Service frequencies also need to be worked out as domestic, cross-border operators share the rail tracks

The agreement reached between Singapore and Malaysia on the commercial and operating model of the high-speed rail linking Singapore and Kuala Lumpur is a significant step in the joint project, but it remains to be seen how some key features will pan out, said observers.

Many issues remain to be finalised, such as financing, service frequencies and cost, they noted.

But Mr Sitoh Yih Pin, chairman of the Government Parliamentary Committee for Transport, is confident these can be managed as both sides work out the details of a project that will boost links between the two.

One of the considerations for the project, analysts said, will be how much to charge operators to use the 350km of track, which will have both cross-border and domestic services running on it.

Under a memorandum of understanding (MOU) signed yesterday, both governments agreed that there will be two train operators for the network - one running the cross-border services and another running the domestic service.

The former will operate the express 90-minute service between Singapore and Kuala Lumpur, along with a shuttle service between Singapore and Iskandar Puteri. The latter will run a domestic route, plying the seven stops within Malaysia.

These stops are: Iskandar Puteri, Batu Pahat, Muar, Ayer Keroh, Seremban, Putrajaya and Kuala Lumpur. The two operators will be appointed through joint tenders.

 

The Iseas-Yusof Ishak Institute's Dr Francis Hutchinson said the MOU makes it clear who is responsible for the infrastructure in each country. "The shuttle service between Iskandar Puteri and Singapore is an elegant solution to the inter-connection between the domestic commuter service in Malaysia and the necessary connection with Singapore," he added.

SIM University economist Walter Theseira said: "There may be pressure to offer a discounted domestic service, which could mean that the international service may have higher fares per km covered. If so, charges to use the infrastructure may also differ by type of service."

Of the 350km track linking Jurong East to Bandar Malaysia in Kuala Lumpur, 15km will be built in Singapore, while the remaining 335km stretch will be in Malaysia. Both governments have agreed to construct the civil infrastructure and stations in their own countries.

A privately-run assets company will be appointed through a joint tender to provide and maintain the trains, tracks and related systems such as signalling and power.

Both operators will pay a train lease fee to the assets company, and a track access charge and concession fee to both countries.

Singapore Management University transport economist Terence Fan pointed out that track charges and train leasing fees will have to be carefully calculated to ensure the system is profitable for the train operators, while still helping to recover the costs of the system.

While reports have said priority will be given to the express service, transport researcher Lee Der Horng from the National University of Singapore said: "Both train operating companies will need to share the tracks and the 'slots' will have to be negotiated." This, in turn, will affect the frequencies of the different services, he said.

Dr Lee added that the prices of the train tickets - which also affect the viability of the high-speed rail - have yet to be determined, but he expects them to be as competitive as budget airline fares.

Despite the challenges looming ahead, observers said the signing of the MOU was a key milestone.

"Much was expected when the project was first conceived in 2013 but progress was less than satisfactory," said Dr Mustafa Izzuddin of the Iseas-Yusof Ishak Institute.

He noted that Malaysian Prime Minister Najib Razak's strengthened political position following the Sarawak state elections and two by-elections puts him in a better position to see the project through.

Datuk Seri Najib said in a blog post last night: "I am excited and extremely committed in pursuing this project till completion."

A version of this article appeared in the print edition of The Straits Times on July 20, 2016, with the headline 'Finance and cost issues to be ironed out'. Print Edition | Subscribe