KUALA LUMPUR: The government is making a big mistake by cancelling the Kuala Lumpur – Singapore High-Speed Rail (HSR) project, Barisan Nasional Strategic Communications Unit chief Datuk Abdul Rahman Dahlan said.
He said it was “too simplistic” for Prime Minister Tun Dr Mahathir Mohamad to say that the project “won’t be beneficial because it’s going to cost our country a huge sum of money and it will make no money at all from the operation.”
Abdul Rahman said Malaysia would lose an estimated RM209 billion in gross national income (GNI) contribution and also the potential to create 70,000 jobs if the HSR was called off.
He also noted that a study by the research body Institute of Developing Economies, Japan External Trade Organisation (IDE-JETRO) found that the HSR would have delivered a US$1 billion (RM4 billion) economic gain to Malaysia every year.
“The abandonment of HSR would also mean that the value of 1MDB's Bandar Malaysia project which was to be the terminus station of the HSR would be substantially decreased - diminishing the ability of 1MDB to repay its debt.
“The government now says the RM110 billion cost of the HSR is the main reason why this project must be cancelled. How did the figure of RM110 billion cost of the HSR come about?
“This differs greatly from the range of RM50 billion to RM70 billion cost that the governments of Singapore and Malaysia had budgeted earlier this year,” he said.
Abdul Rahman also questioned if the government had looked into the net economic benefits and spill-over effects beyond the cost of the HSR project when arriving at its “hasty” decision to cancel.
He said the cancellation of the mega-project would have far-reaching consequences for Malaysia, including disappointing foreign investors who saw the project as a catalyst for more rapid pace of growth.
“The government should not be short-sighted in making an important decision such as this.
“It is obviously clear that the spill-over benefits are so huge that it will be a wasted opportunity if we don’t proceed with the project now.
“Should this project be re-started in future years, the cost would only increase and the debt burden will increase manifold which is totally against the government’s plan to reduce the national debt,” he said in a statement.
Abdul Rahman said the HSR was a strategic project between the governments of Malaysia and Singapore aimed at improving their economies.
He said the project was aimed at elevating the quality of life for people in both countries through seamless travel between the two capital cities, enhance business linkages besides bring the citizens of both countries closer together.
He added that the HSR link would also have reduced travel time between the two cities to 90 minutes.
He said the Singapore-Kuala Lumpur air-route was the busiest international route in the world, with 30,537 flights between both cities recorded in 2017.
With such large yearly passenger numbers, Abdul Rahman said there would have been a strong case for the financial viability of the project, which would have seen terminus stations in Kuala Lumpur's Bandar Malaysia and Singapore's Jurong East.
Abdul Rahman said beyond just passenger traffic numbers, the real benefit of a major infrastructure project such as the HSR was to stimulate economic development along the rail corridors and urban development around the stations/rail terminus or better known as transit-oriented development (TOD).
“The many stations in between, namely Putrajaya, Seremban, Melaka, Muar, Batu Pahat, and Iskandar Puteri which are relatively less developed than Kuala Lumpur or Singapore would stand to gain from development.
“It is forecasted the result of HSR would be no less than the economic multipliers that happened to the Taiwan HSR between Taipei & Kaoshiung and the Tokaido Shinkansen between Tokyo & Osaka,” he added.