February 21, 2013 (TSR) – Singapore Prime Minister Lee Hsien Loong and his Malaysian counterpart Najib Razak have agreed to build a High Speed Rail Link between Kuala Lumpur and Singapore, according to the joint statement issued during the Singapore-Malaysia Leaders’ Retreat on Tuesday.
Mr Najib said that the deadline for the completion of the high-speed rail link is 2020, and that the projected travel time will be 90 mins, from the hours it now takes by rail and road.
The two countries also agreed on a rapid transit system linking Singapore’s Mass Rapid Transit system with Johor Baru.
The leaders have tasked the Iskandar Malaysia Joint Ministerial Committee to look into the details and modalities of the High Speed Rail Link.
The distance between Singapore and Kuala Lumpur is roughly 350km. By comparison, London and Paris are about 480km apart, and the journey between the two cities is approximately two hours and 15 minutes aboard the Eurostar high-speed train.
The two mass “people mover” projects are part of multi-billion ringgit business deals between the two countries.
These include a wellness project at Nusajaya in Johor and a mixed development project between Iskandar Waterfront Holdings Sdn Bhd and the Singapore Government investment arm Temasek in Danga Bay worth RM8.1bil.
Najib said the high-speed rail link would be built via public-private partnership with strong government participation.
“It will be on the basis of private sector funding with the government providing structural support and participation.”
Lee said the project would make it faster to travel between Kuala Lumpur and Singapore by rail than by air, including waiting time.
He recalled that Najib mooted the idea of the link at a meeting some months ago and he felt that it was a good idea.
On the rapid transit system, Lee said the two countries had 12 months to decide on whether to build a bridge or an undersea tunnel between the two countries.
Later the two leaders unveiled the Marina One project, which is in the heart of Singapore’s new central business district undertaken by M+S Pte Ltd, a company owned 60:40 by Khazanah Holdings Bhd and Temasek.
They were also updated on the integrated development DUO joint venture. The two projects have a gross development value of S$11bil (RM26.4bil).
The leaders lauded the excellent progress in relations between the two countries since the Points of Agreement was settled in 2010.
In a three page statement, they agreed to intensify existing cooperation and explore new ways to leverage on the complementarities between Singapore and Iskandar, just across the island republic.
They agreed among others to look into the feasibility of a third road link between the two countries in the long term, and establishing new ferry terminal and Customs, Immigration and Quarantine facilities at Puteri Harbour in Johor this year.
Potential boost to economy with transportation link
The KL-Singapore high-speed rail link is poised to usher in immense economic multiplier effects in both countries during and after the completion of the transportation link, say analysts.
While the direct beneficiary is the construction and materials industry, the project is set to bring indirect economic benefits including a boom in tourism, services, property, enhanced business partnership links and job creation.
“This high-speed rail link will accelerate the economic integration of both countries which is necessary to compete in the increasingly globalised world today.
“While the obvious benefit is the big cut in travel time, other less noticeable gains are the wealth creation effects it will have on the people in both cities,” RAM Holdings’ group chief economist Dr Yeah Kim Leng told The Star.
He said it would create additional jobs in both countries besides boosting businesses that have close links in both countries.
“The additional time saved from travelling means one can opt to work in KL and stay in Singapore or vice-versa,” Yeah added.
He said it was an economically viable project and the bulk of the cost such as land acquisition could be slashed if the governments play a bigger role in supporting it.
Maybank Investment Bank’s chief economist Suhaimi Ilias said the economic multiplier effects would be apparent in the construction, financial, transport and tourism sectors.
MIDF Research’s chief economist Anthony Dass said the rail link was a positive economic catalyst that could contribute up to 1.5% to 2% in today’s economic terms to Malaysia’s total GDP growth when it is linked to the pan Asian high-speed rail network.
Hong Leong Investment Bank’s construction analyst Jarod Soon, meanwhile, said based on rough initial calculations, the 330km high-speed rail could cost around RM30bil, excluding cost of rolling stocks.
However, Soon said the final cost would largely be determined by land acquisition and other factors including alignment and terrain.
The Star also contributed to this report.