HSR cancellation a boon for rail players


LOCAL rail industry players now have an opportunity to improve the country’s existing rail infrastructure after the Kuala Lumpur (KL)-Singapore high-speed rail (HSR) project was aborted.

Experts said there is much to gain from the government’s ongoing effort to rehabilitate and expand some inland rail links to increase rail freight capacity to carry food and other goods.

Institute for Democracy and Economic Affairs senior fellow Dr Carmelo Ferlito said Malaysia needs to move beyond the idea of a KL-Singapore connection and develop rail highways for domestic use.

“Think about a more global North-South link that, within Malaysia, connects Penang to Johor Baru, passing through KL where you can have an interchange for an East-West connection.

“Such an integrated system has to be conceived for cargo and not only for passengers,” he told The Malaysian Reserve (TMR).

Ferlito said many individuals and local businesses continue to rely heavily on the North-South highway as options remain limited.

“Currently, the only alternative is to use planes, and this can be costly,” he said.

“Difficult moments are ones in which we should be more visionary to imagine the future. We need to bring the whole North-South line for Malaysia into the conversation, with an East-West connection, and include cargo into the narrative. This would be a real regional revolution,” he said.

However, Ferlito said if the Malaysian government opts to proceed with the HSR on its own, it must consider a different financial model.

Citing the Entrepreneur Rail Model (ERM), a fully-funded model with private capital, Ferlito said the approach would allow the government to develop infrastructure without stressing its coffers.

“The ERM can then be defined as a proposal to plan and deliver rail infrastructure on commercial principles, funded by land development, and built, owned, operated and financed by the private sector. It is based around the notion of land value creation.

“This model is designed to produce public goods through delivering necessary rail infrastructure, as well as achieving urban regeneration goals and equitably distributing the economic value generated by quality rail infrastructure,” he said.

However, he said the ERM is an entrepreneur’s approach to rail as it is based on finding a new market for the combination of rail and land development. “It cannot be done solely by government planners as land development is mostly a private enterprise activity,” Ferlito added.

Meanwhile, Malaysian Public Transport Users Association (4PAM) president Ajit Johl viewed the cancellation of the HSR negatively as the project would have had a massive impact on the construction sector, providing jobs and creating new opportunities.

“Our domestic market would have benefitted from Singapore’s 5.8 million populations, not including the international travellers to Singapore.

“With the deplorable condition of our national airline that keeps seeking a bailout, the HSR would have been a welcome reprieve,” he told TMR.

Despite the resurgence in Covid-19 cases, he believes the transport sector would swing back into action within the next couple of months on pent-up demand for travel.

“Hence, 4PAM demands the minister of transport to provide a clear, detailed explanation of why it was necessary to have the assets company removed when it was already agreed to in the first place.

“The public deserves to know why this was pertinent to the Malaysian government, and (why it was) willing to risk the whole project, even with the knowledge that it will cost them a huge compensation payment,” he said.

Read our earlier report

HSR project not important for now: Dr M