Three consortia shortlisted for Kuala Lumpur-Singapore High-speed Rail Project

Kuala Lumpur, Malasia (Urban Transport News): Three consortia have reportedly been shortlisted for the Kuala Lumpur-Singapore high-speed rail (HSR) project, indicating progress in the development of this significant infrastructure endeavor.

The identified consortia include YTL Construction Sdn Bhd-SIPP Rail Sdn Bhd, Malaysian Resources Corp Bhd-IJM Construction Sdn Bhd-Berjaya Rail Sdn Bhd-Keretapi Tanah Melayu Bhd (MRCB-IJM-BRail-KTMB), and a Chinese consortium led by state-owned China Railway Construction.

Among these consortia, it is speculated that only the Chinese consortium possesses the financial capacity to undertake the project through private funding. The estimated cost of the HSR project was RM72 billion during its development phase from 2015 to 2020, though it's likely to have increased significantly since then.

The likelihood of the Chinese consortium securing the project increases if the government insists on private funding, albeit with a possible requirement for a bumiputera partner. Notably, the MRCB-IJM-BRail-KTMB consortium's proposal would lead to significant exposure for the Employees Provident Fund (EPF), given its substantial shareholding in MRCB and IJM.

MyHSR Corp Sdn Bhd, responsible for the project's development and implementation, initiated the process by issuing a request for information (RFI) in July last year, receiving concept proposals from seven local and international consortia comprising 31 firms. The evaluation findings from the RFI will be presented to the Ministry of Transport and the cabinet for further consideration.

While the shortlisted consortia remain undisclosed, it's evident that the government intends to proceed with private funding for the project. Gamuda Bhd, which submitted a concept proposal independently, faces challenges in securing the project due to the government's preference for private funding.

The possibility of government guarantees, either in the form of debt or revenue guarantees, remains uncertain for Gamuda's proposal. Similar HSR projects in Indonesia have required government guarantees to manage cost overruns, underscoring the complexities involved in financing such large-scale infrastructure projects.

The Indonesian experience with the Jakarta-Bandung HSR serves as a pertinent example, where government guarantees were essential to manage cost overruns and secure funding from Chinese financial institutions.

As discussions continue, the fate of the Kuala Lumpur-Singapore HSR project hinges on various factors, including funding arrangements, consortium capabilities, and government support, ultimately shaping the future of transportation connectivity between the two cities.