A truncated high-speed rail service that ends in Johor Bahru rather than Singapore will significantly reduce the potential economic benefits of the railway project.
Francis E. Hutchinson
21 December 2020
Once touted as a “game-changer” and a means of slashing the travel time between Kuala Lumpur and Singapore to a mere 90 minutes, the High Speed Rail (HSR) between the two cities could grind to a halt before it even starts. According to Malaysian media reports on 13 December last week, Putrajaya is mulling over proceeding with the mega project – but ending the service in Johor Bahru rather than Singapore.
The Kuala Lumpur-Singapore High Speed Rail (KL-SG HSR) project was the brainchild of the Malaysian Prime Minister’s Performance and Management Delivery Unit (PEMANDU) and first mentioned in the 2010 Economic Transformation Programme (ETP). Looking at current and future demand for air travel, the heavy use of the Causeway and the physical distance separating the two, the ETP advocated constructing the rail link to connect Greater Kuala Lumpur’s 8 million and Singapore’s 5.5 million residents.
From 2013 to 2016, technical staff from Malaysia and Singapore hashed out logistical and operational issues. This ranged from the location of the terminus at each end; customs, quarantine, and security arrangements; and the tendering process. This culminated in December 2016, when Lee Hsien Loong and then-Malaysian Prime Minister Razak signed a legally-binding bilateral agreement to build the HSR. Construction was slated to start in 2018.
However, Malaysia’s political tsunami in that year halted the project’s momentum. Najib lost the prime ministership to Mahathir Mohamad, who led the newly-installed Pakatan Harapan coalition. Mahathir claimed that pursuing the HSR – estimated to cost at least S$20-25 billion excluding land acquisition – would increase Malaysia’s burgeoning debt levels. Thus, the two countries agreed to postpone the project until 31 May 2020. Following the advent of the Perikatan Nasional coalition in March of this year, Malaysia requested a further delay until 31 December 2020. This was agreed to by Singapore, on the understanding that this would be the second and final postponement.
The possibility of a Kuala Lumpur-Johor Bahru HSR is a new and surprising development. This is not to say that a commuter service in Malaysia linking Kuala Lumpur and Johor Bahru to smaller urban centres like Muar, Batu Pahat, and Seremban is without merit. The push in Malaysia away from cars towards rail, and public transport more widely, is laudable. And, experience from HSR networks in Japan shows us that smaller cities along these routes tend to expand, which is a great way to decentralise economic growth. If this is proven to be true, the “truncated” HSR service would face numerous problems.
The possibility of a Kuala Lumpur-Johor Bahru HSR is a new and surprising development. This is not to say that a commuter service in Malaysia linking Kuala Lumpur and Johor Bahru to smaller urban centres like Muar, Batu Pahat, and Seremban is without merit.
First, should Malaysia withdraw from the project or proceed with a different design that, say, excludes Singapore, it would be liable for compensation to the city-state. Available estimates are that this would be between S$100-150 million. While not specifying the amount in a press release in late November, Singapore’s Ministry of Transport reiterated that compensation would be necessary should Malaysia not proceed with the HSR.
Second, the initial rationale and cost arguments for the HSR was premised on PEMANDU’s prediction that demand for high-speed rail travel between the two cities would increase by a factor of three to six. In addition, the greater number of travellers would constitute a new source of demand for goods and services at either end.
Given its price tag, the rail link will need to be intensively used. HSR lines in Japan are used more intensively than is expected to be the case between KL and Singapore, and most of these services do not break even from ticket sales. What makes them viable is the demand for goods and services – particularly hotels and malls – around the stations. This again requires leveraging on large populations which want to travel and spend. It is not clear that Johor Bahru’s one million population would be enough to sustain this.
Last, there are already rail connections between Kuala Lumpur and Johor Bahru. The older established line runs straight up from Johor Bahru through Kluang, Segamat, Gemas and Seremban before ending in downtown Kuala Lumpur. This link is being upgraded through electrification and double-tracking, which will shorten the travel time between the two cities to four hours.
Beyond the rumours, there are indications that Malaysia may still be in two minds about the project. In the recently-approved 2021 Budget, the government earmarked RM15 billion for key transport works, including double-tracking projects between Gemas and Johor Bahru and in the Klang Valley. However, despite statements that the government intends to proceed with the project, it is not clear how much will be allocated to the KL-SG HSR, which is “subject to further negotiations with Singapore”. The process towards building the HSR has had a number of stops. Hopefully, the recent proposal to truncate the HSR route will not be the final one.
Dr Francis E. Hutchinson is a Senior Fellow and coordinator of the Malaysia Studies Programme at the ISEAS – Yusof Ishak Institute. Kevin Zhang is a Research Officer at the same institute.
ISEAS Commentary — 2020/216
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