Asia Pacific’s network of high-speed railways is moving south at a snail’s pace, with opposite ends of the line at different stages of construction

The Kuala Lumpur-Singapore HSR is a strategic project between the Governments of Malaysia and Singapore that aims to facilitate a ninety-minute travel time between Kuala Lumpur and Singapore. The project is expected to enhance business links and bring the people of both countries closer together.

The project includes domestic services within Malaysia that will improve intercity connectivity and promote economic agglomeration under the Socio-economic Development Programme intended to benefit local communities along the corridor.

The Governments of both countries signed a Bilateral Agreement on December 13 2016, which captured the key points of agreement on the project, including the technical parameters, commercial model, customs, immigration and quarantine clearance, safety and security matters, regulatory framework and project management approach. MRCB Gamuda Consortium and YTL-THP were appointed on May 2 2018 as the Project Delivery Partners for the construction of civil works in Malaysia.

Eight stations are currently planned for the Kuala Lumpur–Singapore HSR: Bandar Malaysia, Sepang-Putrajaya, Seremban, Melaka, Muar, Batu Pahat and Iskandar Puteri stations in Malaysia and the Jurong East station in Singapore, with operations of the KL-SG HSR service between Kuala Lumpur and Singapore targeted for commencement by December 31 2026.

Local benefits

MyHSR predicts that the Kuala Lumpur-Singapore High Speed Rail will bring huge benefits to the local supply chain and have put in place measures to ensure Malaysian companies have a fair crack at the various contracts that are available.

The project is expected to generate more than 70,000 jobs, thus creating opportunities for professionals, skilled workers, and students from all over the country to work along the corridor of the 335-kilometre alignment within Malaysia.

In addition, more than sixty civil work packages will result in over 5,000 sub-contract packages opened to local firms which will stimulate the growth of local industries. More than forty per cent in values of the civil work packages will be allocated to local Malaysian companies. Dato’ Mohd Nur Ismal bin Mohamed Kamal, CEO of MyHSR is quoted as saying: ‘MyHSR Corp supports the push for localisation and has at the start of this procurement process emphasised the importance of local players in the project. However, given that HSR is new in Malaysia, we have also asked our local players to partner with HSR expertise globally to ensure that we build a safe and efficient HSR.’

The project will give local engineers and graduates the opportunity to upskill and gain experience in the HSR industry as plans are in progress to source engineers from various local universities throughout the country, with special focus on the seven cities.

Dividing the scope of works according to northern and southern packages will ensure that civil works are completed on time and within budget. In addition, the two consortia will provide a wider pool of resources and expertise necessary to deliver the massive project. $52.5 billion is estimated in Gross National Income (GNI) contribution based on spill over effects in the rail and supporting industries as a result of developing HSR capabilities in 2035.

Assets Company tender

Bidders for the Assets Company (AssetsCo) tender will now have until December 28 2018 to submit their proposals. The extension will not affect the December 31 2026 date for the commencement of the HSR Express Service from Kuala Lumpur to Singapore.

The AssetsCo will be responsible for designing, building, financing and maintaining all rolling stock, as well as designing, building, financing, operating and maintaining all rail assets such as track work, power, signalling and telecommunications for the KL-Singapore HSR project. The AssetsCo will also manage the system network for operations and maintenance needs.

Following the close of the tender, MyHSR and SG HSR expect to complete their evaluation and announce the tender results by the third quarter of 2019.

Linking the chain

The success of the Kuala Lumpur-Singapore High Speed Railway is predicated on the financial wealth that both cities currently enjoy. Improving the link between two economic powerhouses that already see high capacity traffic in each direction is a no-brainer but stretching that line further north into Thailand and then beyond might be a harder sell.

Whilst Singapore and Kuala Lumpur work towards a common goal of high-speed connectivity, Thailand has to decide which country it would rather be connected to. With the temptation of a high-speed train station in Vientiane on the other side of the Mekong River beckoning, the Thai Government has so far only committed to a high-speed railway connecting Bangkok to the northeast city of Nakhon Ratchasima but it is vital that both ends of the line are extended north and south.

In Laos and Thailand, authorities are preparing for the start of freight rail transport between the two countries. Deputy Director General of the Lao Railway Department, Sonesack Nhansana, said that the transport of goods by railway could cut costs by thirty to fifty per cent compared to road transportation.

Whilst these projects are not on the same grand scale of the high-speed railway their progress does help the wider narrative of rail being part of the future development of Southeast Asia. Even though the Thai Government has dithered repeatedly on whether or not they will even build their stretch of the high-speed railway, the good news in Laos and China Railway Group’s renewed impetus on overseas revenue could see the project increase in popularity.

Last year Thailand began construction of a depot in the northeast of the country. The $57 million logistics centre is expected to be completed in three years. The project is funded as a PPP (public-private partnership) and jointly managed by the Port Authority of Thailand and the State Railway of Thailand along with Khon Khaen City Development, according to Chairman of the Provincial Chamber of Commerce, Khemchart Somjaiwong.

The depot is located close to an existing train station and will serve as a logistical centre for processing and transporting agricultural goods to be carried around the country and shipped overseas. Customs clearance would be done at the facility and then transported to Laem Chabang port on the eastern seaboard for export. The bill currently on the table calls for an asset-managing agency by 2020, a railway-operating agency by 2024 and a maintenance agency by the same year.

Bidding for an eleven-kilometre long stretch of high-speed railway in Thailand is expected to take place in August, with a revised blueprint currently being reviewed in China.

Speeding up trade

A lot of focus right now is on the metro systems being installed in Hanoi and Ho Chi Minh but the impact of a revitalised railway linking the two cities would reverberate around the region – namely the Greater Mekong Sub-region (GMS). According to the Asian Development Bank, cross-border trade within the GMS has increased nearly a hundred-fold – from just $5 billion in 1992, to over $414 billion as of 2017.

At the GMS summit held earlier in the year Ministers from the relevant countries endorsed a new plan – the Hanoi Action Plan – that sets forth a path for strengthening links between rural and urban areas in the sub-region.

The Greater Mekong Subregion Economic Cooperation Program Strategic Framework, 2012–2022 stresses the importance of ensuring that all countries in the sub-region are connected to the GMS rail network by 2020. This ambitious goal calls for the development of a seamless rail network in the Greater Mekong Sub-region as part of a regional cooperation strategy that promotes cross-border infrastructure development.

The Asian Development Bank (ADB) funded a technical assistance project to assess the requirements for regional rail connectivity and prepared the report, Connecting Greater Mekong Subregion Railways: A Strategic Framework, which was endorsed at the GMS ministerial meeting held in Hanoi in August 2010.

This strategic framework provided a practical approach to GMS railway development with an initial outline for achieving integration and interoperability. It identified priority initiatives, built a platform for further dialogue, and provided a context for evaluating future projects. This has led to the establishment of the Greater Mekong Railway Association (GMRA), whose membership includes all the GMS countries.

Jamie Leather, Principal Transport Specialist at ADB and lead officer in charge of the GMRA said: ‘Rail connections within the GMS could be a game changer in terms of intra- and inter-regional trade and transport for Southeast Asia, reducing travel time and cost while increasing reliability and volume of transport.’

The Laos connection

In Peninsula Malaysia high-speed rail is expected to herald an economic boom time for Malaysian companies whilst providing Singaporeans with another pipeline to tap into. Far in the North in Laos however, the economic benefits are more of a payoff than a pay rise.

Chinese involvement in Thailand’s high-speed railway is well known, with 77 Chinese engineers being granted the necessary licenses to work on the $5.2 billion first phase of the railway. This had initially been a sticking point as engineering is a protected industry in Thailand making it impossible for non-Thai citizens to be employed as engineers.

Thailand’s Prime Minister passed a law allowing Chinese engineers to work on this project back in June last year.

In Laos however, Chinese investment comes wholesale, with the high-speed railway being built to connect China to Thailand and the other nearby GMS countries. To smooth over the fact that the railway itself might not directly bring the same economic boomtime to Laotians as it will bring elsewhere, China has offered a three-year grant of $626 million to finance initiatives that will bring clean water and power to around 100 villages across Laos.

Part of the deal for the railway requires Laos to provide land for construction which has led to local communities across four provinces and Vientiane which the railway will pass through demanding compensation. The amount has been approved but will once again require a loan from China. Slightly over $78 million has been allocated for compensation payments.

Two-way trade between Laos and China reached $3 billion in 2017, an increase of 28.6 percent on the year before. As of March 23, construction of the railway was 26.5 percent complete. In the first three months of 2018, 221,800 Chinese visited Laos, an increase of 32 per cent on last year.