Govt may not go with S’pore for HSR project, end rail line in JB: RHB Research

KUALA LUMPUR – The government is likely to make an announcement on the Kuala Lumpur-Singapore High-Speed Rail (HSR) by year-end, said RHB Research.

It said the expectation is based on its engagement with industry players.

“Based on our checks with some infrastructure industry players, the government is likely to make an announcement on the HSR project soon. Media reports quoting a source stated that the government may go ahead with the project, but without Singapore, and is ready to pay a compensation of RM300 million to Singapore,” RHB Research said in a note today.

It said that the track was now proposed to end in Bukit Chagar, Johor Baru, which is the connection to the JB-Singapore Rapid Transit System (RTS).

“There will still be two tracks – direct and transit lines from Kuala Lumpur to Johor Baru, and the stations in between Kuala Lumpur and Johor Baru will be the same as the previous proposal i.e. Bandar Malaysia, Seremban, Ayer Keroh/Jasin, Muar/Pagoh and Batu Pahat.

“The Putrajaya station may be located at the KL International Airport (KLIA) before reaching Bandar Malaysia.

“Previously, we were hopeful for a seamless connection from Bandar Malaysia to Singapore, given the ease of travel, as well as the potential boost the project can bring to the Malaysian real estate (sector),” it added. 

RHB Research said the number of travellers between Kuala Lumpur and Singapore would increase significantly in the long run, given that Singapore is a renowned international financial hub.

“However, if the HSR is to end in Bukit Chagar, we think the spillover effect will not be that material, but will still be positive overall, especially for the stations in between the two terminals. Local business and weekend travellers from Singapore will be key contributors to the ridership,” it said.

While it cannot confirm the developments until the government makes its announcement, RHB Research said selective property stocks will likely see trading opportunities ahead.

Assuming the previous proposed alignment is unchanged, major beneficiaries are set to include Sime Darby Property, due to its massive land bank in Labu and Pagoh, IOI Properties with land bank in Ayer Keroh and Jasin, and Matrix Concepts with land bank near KLIA and Seremban. 

“Companies with large land banks in Iskandar may also benefit over the long term due to the materialisation of the Rapid Transit System, which will be completed earlier in 2025-2026 compared with the HSR,” said RHB Research. – Bernama, December 16, 2020