KUALA LUMPUR - A former Malaysian minister who was in charge of the high-speed rail (HSR) project said the new government is making a "short-sighted" move to scrap the KL-Singapore rail network line, as the project has big multiplier effects that would boost job creation and the economy.
Datuk Seri Abdul Rahman Dahlan, who was Minister in Prime Minister's Department (Economic Planning Unit) under previous premier Najib Razak, in a statement on Tuesday (May 29) also disputed the project's cost as mentioned by new Prime Minister Mahathir Mohamad at RM110 billion (S$37.2 billion).
Mr Abdul Rahman said Singapore and earlier Malaysian government had estimated it to cost between RM50 billion to RM70 billion.
Tun Mahathir said on Thursday that the decision to scrap the project was "final", as the Pakatan Harapan (PH) government looks at ways to reduce the country's debts of RM1 trillion racked up by the previous administration.
Mr Abdul Rahman said: "Did the PH government take into account the net economic benefits and spillover effects, beyond the cost of the HSR project, before arriving at the hasty decision to cancel it?"
He added: "The government should not be short-sighted in making an important decision such as this. It is obvious that the spillover benefits are huge."
Inked by the previous Najib administration in Dec 2016, the 350km line will slash the travelling time between Singapore and Kuala Lumpur to 90 minutes when completed in 2026. Most of the line - 335km of it - will be in Malaysia, with the remaining 15km in Singapore. There are eight stations - seven in Malaysia and one in Jurong East.
Mr Abdul Rahman said: "The result of the (KL-Singapore) HSR would be no less than the economic multipliers of the Taiwan HSR, between Taipei and Kaoshiung, and the Tokaido Shinkansen, between Tokyo and Osaka."
He said Tun Mahathir's remarks that the HSR would not make money from its operations were "too simplistic", as the project would create 70,000 jobs and potential returns from land value appreciation would serve to pay off costs.
Johor Real Estate and Housing Developers Association branch chairman Steve Chong Yoon On said the move to scrape the HSR was a "setback" for developers especially those building homes near the proposed stations, but they are supportive of the government initiative to curb spending.
Mr Abdul Rahman asked about the new government's valulation of the project cost.
"The Pakatan Harapan government says the HSR's RM110 billion price tag is the main reason the project must be cancelled. How did they arrive at this figure? This differs greatly from the range of RM50 billion to RM70 billion that the governments of Singapore and Malaysia had budgeted earlier this year," he asked.
PM Mahathir said on Thursday that Malaysia will consult with Singapore on its plan to scrap the HSR, but Kuala Lumpur might have to pay a penalty of 500 million for cancelling the project, but he was unsure if this was in ringgit or Singapore dollars.
At the 8th Singapore-Malaysia Leaders' Retreat in January this year between Prime Minister Lee Hsien Loong and then-PM Najib, they were asked on how the two countries would ensure projects such as the HSR will be unaffected by political changes, as these projects could span several terms of government.
Mr Lee said: "Like all projects which involve more than one country and expand more than one term of government, it requires long-term commitment. The commitment is formalised and the agreement which we signed between the two governments today, is a binding agreement, and whoever is the government on either side, well this is an agreement which they inherit and which they are party to.
"If the subsequent government has other ideas, well, that would have to be dealt with and the agreement will deal with these contingencies. But I have no doubt on Singapore's side, we have every intention of implementing what we signed and committed to today."
