KUALA LUMPUR – Despite apprehensions on the feasibility of reviving the Kuala Lumpur-Singapore High-Speed Rail (HSR) project after it was axed, economists believe that it is still viable in the long run and will likely bring ample economic returns to the country.
Economists said that the HSR can be beneficial and is economically practical for Malaysians, although the previous Perikatan Nasional (PN) administration had paid RM320 million to the republic as compensation for the termination of the project.
Barjoyai Bardai of Universiti Tun Abdul Razak said it is not a mistake for Prime Minister Datuk Seri Ismail Sabri Yaakob to suggest rekindling the megaproject as Malaysia, which aims to be a developed nation in five years’ time, needs infrastructure like the HSR.
“I’m not shocked but I’m grateful that he (Ismail Sabri) brought it back because we need infrastructure like this. If we look at other developed nations, they have their speed trains.
“It will create a tourist attraction in Malaysia. For example, Melaka will benefit most when they plan the stations as it will be a new tourist destination.
“There will also be multiplying effects in the economy, if this project is revived. Appointed contractors and vendors will benefit directly from it,” Barjoyai told The Vibes.
On January 1, Malaysia and Singapore jointly announced the termination of the HSR project, as both countries failed to reach an agreement on changes proposed by Malaysia before the project agreement lapsed on December 31, 2020.
In March this year, Malaysia announced that it had paid RM320 million to Singapore for costs incurred in the development of the HSR project and in relation to the extension of its suspension.
On Monday, Singapore Prime Minister Lee Hsien Loong said the republic is open to fresh proposals from Malaysia on the HSR project although both countries have previously agreed to terminate it.
Speaking at a joint press conference with Ismail Sabri, Lee said that it was Ismail Sabri who proposed to revive the project.
Following the announcement, former finance minister Lim Guan Eng had lambasted the idea, saying that Malaysia has become a global laughingstock for wanting to resurrect the project.
In a statement on Tuesday, Lim, who is also DAP secretary-general, had also called for the ministers responsible for the compensation paid to the neighbouring country for the termination of the project to resign.
“Tan Sri Muhyiddin Yassin has already resigned as prime minister and the ministers involved such as International Trade and Industry Minister Datuk Seri Azmin Ali, Economic Affairs Minister Datuk Seri Mustapa Mohamad, and the Transport Ministry must explain,” he said.
Ministers Responsible For Recommending The Payment Of RM320 Million In Compensation Cost To Terminate The KL-Singapore High Speed Rail(HSR) Project Should Resign. pic.twitter.com/hjHfEGdKKX
— Lim Guan Eng (@guanenglim) November 30, 2021
Barjoyai is of the view that the government should renegotiate with Singapore for better terms in the fresh proposal in order to indirectly recover the loss of the compensation amount paid.
“To me, calling the project off was an emotional decision in the first place. They (PN) just wanted to be seen as not being the same government as before.
“But if the Singapore prime minister is a gentleman, both the governments can rework the compensation. Now that the opportunity is back, the Malaysian government should renegotiate the terms in the country’s favour.
“In that sense, the government can renegotiate for better terms and recover the loss of RM320 million, indirectly,” he said.
In addition, Barjoyai urged Putrajaya to “return to the drawing board” and perhaps consider getting China on board.
“It may complicate things, in the sense that we have another party involved. But with China’s help, we could maybe expand the HSR to Thailand.
“We could expand the project from Singapore to Kuala Lumpur and then to Bangkok. We can also complete the Belt and Road Initiative, with China in the equation,” he opined.
Meanwhile, economics professor Geoffrey Williams from the Malaysia University of Science and Technology shared a different sentiment, saying the compensation issue would not be a factor in a new deal because it was paid to settle the old one.
“The compensation issue is not really important. This is a project estimated at around RM68 billion, although some estimates put it at RM110 billion.
“So the RM320 million is small, relative to the total cost. It will not affect the overall viability of the project either way,” he said.
Echoing Barjoyai’s views, Geoffrey said it was predictable of Ismail Sabri to want to revive the project.
“This is a predictable decision by Ismail Sabri because Barisan Nasional, and especially Umno, favour mega infrastructure projects.
“It was originally championed by former prime minister Datuk Seri Najib Razak so it is popular with his supporters,” he noted.
Although the HSR may add value in terms of jobs and investment along the route that can help economic recovery, Geoffrey said these benefits may be too limited to help the people.
“It may even detract from post-Covid-19 recovery plans. My general view is that if it genuinely has economic and commercial value, then the private sector should be more involved and carry more of the costs and risks.” – The Vibes, December 3, 2021
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