KL-Bangkok HSR may not be economically viable

by NUR HANANI AZMAN & AUFA MARDHIAH / pic by TMR FILE

THE plan to have a Kuala Lumpur (KL)-Bangkok High-speed Rail (HSR) is far from economically viable as the distance between KL and Bangkok is greater than to Singapore.

This, according to transportation consultant YS Chan, will make it hard to attract private sector participation due to “astronomical costs”.

“It will be no surprise should the study find that a KL-Bangkok HSR would be feasible by the year 2040 if the service is extended to Singapore. In any case, Thailand would gain much more from this because most of the track and stations are in Thailand territory thereby benefitting the local population, just like Malaysia would in a KL-Singapore HSR,” he told The Malaysian Reserve (TMR).

“It would have made better sense if Thailand had initiated the feasibility study and brought in China, which could provide the funding, construction, operations and larger volume of passengers from China into Thailand, Malaysia and Singapore and the massive project on profit-sharing basis without the three Asean countries bearing financial risks,” he added.

Malaysia and Thailand on Feb 26 have agreed to carry out a feasibility study for an HSR route between KL and Bangkok.

On Monday, Transport Minister Datuk Seri Dr Wee Ka Siong said that the Transport Ministry is also mulling a feasibility study on a KL-Bangkok HSR.

The ministry had been tasked to initiate discussions with the Singaporean government on the KL-Singapore HSR project and that talks were still in the early stages.

According to Chan, there is an existing railway track from Bangkok to Singapore and there is no need to lay another track just to accommodate high-speed trains.

“Electric trains are running fast from Gemas, Negri Sembilan, to Padang Besar in Perlis, at the Thailand border at up to 140kph and are being extended to Singapore and could likewise to Bangkok.

“Having an additional HSR track will cannibalise passenger traffic, rendering both services a failure. And the three cities are well served by air with Bangkok and Singapore being major aviation hubs,” he added.

Meanwhile, Centre for Market Education CEO Dr Carmelo Ferlito opined that the project should shift its focus from the KL-Singapore connection to the entire Penang-KL-Johor Baru line, including other main hubs and creating a point of contact for an east-west connection.

He said the project would be more successful if it aims at including both Singapore in the south and Thailand in the north, at the same time opening the doors for a modern and integrated logistics system for the entire region.

“Malaysia needs to rethink its entire north-south connection and move people and goods traffic from roads to trains.

“Malaysia could implement a successful north-south high-speed rail for both passengers and cargo with all the due differences, creating opportunities for economic development and at the same time reducing the environmental impact created by cars, buses and trucks,” he told TMR.

Ferlito said the project should not be simply financed by the government in order to be economically sustainable, which requires a sound and ambitious development pace that needs to be maintained exclusively.

Meanwhile, Malaysian University of Science and Technology’s Institute of Postgraduate Studies dean Dr Geoffrey Williams said this project will benefit trade and tourism only if it adds to existing trade flows rather than displacing trade from existing transport and logistics options.

He said there would need to be a clearer statement of how this extra value will be created or why there would be extra additional trade since this was not clear last time, if it had been then the economic viability of the project would have been definitely worthwhile.

“The extra benefits from trade or other economic impacts clearly were not considered to be definitive. That’s why it was abandoned because actually it was always a marginal project. For the Singapore side, it was only estimated to create US$640 million (RM2.7 billion) per year which is quite marginal actually.

“If it is a valuable project, let the private sector run it,” he told TMR. The economic benefits for the KL-Singapore route were estimated at between US$1.15 billion and US$1.6 billion per year so it could recover its cost in less than nine years provided its on budget and it serves the purpose for which it is built.

He said the economic impact was considered to be four times that of comparable projects in Thailand for example. However, the key question is if it is such a good investment then why doesn’t the private sector offer to build it.

“Or put another way, if it will create 70,000 jobs and recover its costs in nine to 10 years, why doesn’t the government sell the license to build it to get it done to add value?

“Why does the government have to invest in a project which is viable on its own terms as a good investment prospect? This is always the question a government should ask,” he said.