Glaring difference between Malaysia’s and Singapore’s transparency would cause investors to lose confidence
by NUR HANANI AZMAN / pic by BERNAMA
EXPERTS are urging the government to explain various issues, especially on the removal of assets company (AssetsCo) in the Kuala Lumpur-Singapore high-speed rail (HSR) project, as it could affect investors’ confidence in the country.
Economist Tan Sri Dr Ramon Navaratnam said the glaring difference between Malaysia’s and Singapore’s transparency would cause investors to lose confidence in the former.
“The cancellation also proved that this project lacks transparency and consultation with the people, unlike Singapore which keeps its public informed on the details,” he added.
According to MyHSR Corp Sdn Bhd website, an AssetsCo was responsible for designing, building, financing and maintaining all rolling stock, as well as designing, building, financing, operating and maintaining all rail assets like track work, power, signalling and telecommunications, among others.
It was also tasked to coordinate the system’s network capacity for operations and maintenance needs.
“Why is the removal of AssetCo a big deal? Perhaps, they wanted to use it as political gain? There are so many speculations and the government must clarify,” Ramon told The Malaysian Reserve (TMR) yesterday.
Minister in the Prime Minister’s Department (Economy) Datuk Seri Mustapa Mohamed, however, recently denied speculation that government leaders had wanted to appoint cronies through direct negotiations for the HSR.
Singapore Transport Minister Ong Ye Kung told the country’s Parliament on Jan 4 that Singapore could not accept Malaysia’s proposal to remove the systems supplier and network operator of the HSR project as it constituted a “fundamental departure” from the original agreement.
Ramon added that the cancellation was unfair for the people as the huge compensation amount will only add on to the economic burdens brought on by the Covid-19 crisis.
He stressed that although the compensation is much lower than S$270 million (RM821.73 million), it will still be the people’s money which could have been channelled for better uses.
Meanwhile, transportation consultant YS Chan said AssetsCo is like a joint venture between Malaysia and Singapore where both countries have an equal say on the procurement and operations of the HSR through an open and transparent tender.
He said the removal of AssetsCo was to allow Malaysia to appoint contractors and vendors through open tenders or direct negotiations, without Singapore’s interference.
“Technically speaking, government agencies should be able to procure suitable products at lowest prices, but often, it has not been the case due to various reasons, such as corruption or incompetence. This can also happen in the private sector.
“Perhaps, we can recoup up to RM1 billion as compensation to Singapore by saving a few billion, maybe by scaling down the size of the HSR stations. But costs will continue to rise the longer we wait,” he told TMR.
Chan said in the 1990s, the estimated cost for the HSR was only RM8 billion which swelled to RM30 billion in 2013.
“The latest estimate was RM60 billion, but the Barisan Nasional administration gave a figure of RM72 billion,” he said.
Interestingly, on July 18, 2018, Economic Affairs Minister Datuk Seri Mohamed Azmin Ali said the government’s estimated RM110 billion price tag for the HSR project included hidden costs not revealed by the previous administration.
“In other words, it is easy for any government of the day to claim having saved billions of ringgit on the HSR project.
“With real money in short supply, it is best to abort the project altogether and instead, build another expressway running along the west coast of the peninsula for both economic and strategic reasons,” he explained.
Chan said Japan has been using bullet trains, known as Shinkansen since the 1960s, followed by the French with their faster TGV, while China has the most extensive HSR network, although it probably got there more through default than by design.
Hence, he opined that a late developer does not necessarily lose out in all areas.
“While countries with mature railway systems grapple with a combination of old and modern machinery and equipment, China was free to introduce the latest state-of-the-art technology.
“Likewise, having delayed the introduction of HSR by 15 years gave us the opportunity to leapfrog others if the Land Public Transport Commission opts for the magnetic levitation (maglev) technology,” he said.
Maglev trains are as fast as commercial aircraft and have reached speeds approaching 600kph. Those in use between Shanghai and the Pudong International Airport have proven to be reliable.
Cruising at an average speed of 500kph, it would take only 48 minutes to travel 400km and could put Kuala Lumpur and Singapore as iconic cities on the world map.
However, Chan admitted that the cost for maglev is too high.