Is HSR A Game-Changer Or Slave Of Circumstances And Who Is Enticing It…

At last, the RM8.9 billion, 192-km Gemas-Johor Baru electric train service (ETS) project was officially handed over to the government. Construction began in 2017 and it enables continuous ETS connectivity from Padang Besar to Johor Baru. 

ETS was announced in 2011 to replace the 952km single-rail line with double-rail tracks powered by electricity. It is supposed to reduce travel time, ease road congestion, “revolutionise” transport options and represents a greener and potentially cost-effective way to travel and enhance economic, social and mobility development. Travel time between KL and JB is expected to be reduced to about four hours plus, compared with roughly seven hours now. 

Do we then need the KL-Singapore high-speed rail (HSR) where the travel time is supposed to be 90 minutes?

HSR – an Economic Transformation Programme to transform Malaysia into a high-income nation – is touted as more than just a transportation project, but an impetus towards socio-economic development, greater accessibility leading to improvements in human capital, consumption patterns and economic activity in a continuous virtuous cycle of growth. After much work, it was cancelled in 2021 and upon its revival, new feasibility studies and a Request for Information (RFI) exercise – under a public-private partnership (PPP) structure – were conducted by MyHSR Corporation in 2023 and 2024.

A comprehensive evaluation, to determine the project’s feasibility and financial viability under the private funding model was completed and presented to the Cabinet in January 2025 but a final decision on viability and structure is still pending.

Proponents justification include, without the HSR the JS-SEZ risks shifting the regional economic focus towards Johor and Singapore, compromising KL’s regional and international competitiveness and HSR’s long-term returns should cover investment costs. While another group said, the HSR will complement JS-SEZ.

Estimated projected cost has been reduced from about RM120 billion to around RM70 billion. In 2020, the estimated cost at RM 72 billion was considered 40-50% higher than the industry average for projects in Europe and China. According to a European Union audit on HSRs in the region, the cost should be around RM42 billion. Meantime, Vietnam is building a 124 km HSR, costing US$5.4 billion only and designed to include cargoes to enhance national logistics. Thus, there are inherent cost concerns on our HSR.  

Analysts have questioned the project’s low return on investment without government subsidies and a significant challenge for private financing.

Facts and Challenges

1. Comparing the objectives of the HSR and ETS, I gathered the only major difference is the travel time. 
2. What extra developments can HSR (with only seven stations) create that ETS can’t?  
3. The dream of a seamless geographic reality and passenger experience may be visionary or transformational but how many will travel to meet family, conduct business or enjoy leisure and pay significantly more? Does the high-value, time-sensitive traffic make the masses? Note that the KL-JB ETS has raised a debate on fares.
4. We have done feasibility studies and evaluations since 2011 but have not decided on a proper structure. Surely, the concept proposals received in 2024 have a validity period.
5. It is strange on how we will decide unilaterally on the overall viability without inputs and deep engagements with Singapore. Previous discussions faced challenges in key terms. While we are active, Singapore is cautious with no formal/binding commitments and will accept only proposals on a “clean slate” having previously experienced a costly termination in 2021. There is also not much news from SG HSR Pte. Ltd., a dedicated entity responsible for the HSR project.
6. From Singapore’s perspective, I guess it is a no-brainer especially with the push on JS-SEZ. The zone could disproportionately benefit Singapore, creating an unbalanced economic ecosystem. Be mindful, since each country would be in charge of its own stations and infrastructure, only 15km of the 350km line is within Singapore.
7. How much more integration do we need with our neighbour? There is also talks about a second RTS link between Tuas and Iskandar Puteri.
8. Do we still want to provide cheap land, cheap labour and trade dependence without creating our own high-potential growth products and sectors? 
9. Since there will be a separate domestic and a non-stop express service and the international operator having priority over the domestic operator, are we prioritising our neighbour and developments around the domestic stations ‘di anak tirikan’?
10. How about the risk of “secular stagnation” due to global shifts like deglobalisation, tech disruption and demographic pressures due to its geographic size?
11. How can HSR support further opportunities for mutual trade and help to support cross-border flows of goods if HSR is not designed to carry cargoes?
12. Did the revised RM70 billion figure include the cost of diversion to Forest City?
13. What will happen to all the Malaysian airlines? Traffic will be reduced and put pressure on fares. Offering choice is not an option. Be mindful of our commitment for aircraft purchases with the US.
14. How will KTMB’s financial performance be affected? Competition and   complementary effects are also not an option. 
15. What about development imbalances with larger cities “sucking up” the resources of the surrounding areas. There are already reports showing Johore’s economic performance have surpassed Penang and Selangor.
16. Obviously, there will be increase in real estate prices and issue of affordability and how about slumps with over-capacity? Developments must benefit the many, not just the few and a place we are proud to call home.
17. Further ahead, if we subscribe to the dream of connecting Kunming to Singapore through HSR and ECRL, the latter is designed as medium-speed but HSR is for high-speed and passenger services only and the line connection is not complete. 
18. Under a PPP initiative, the greater risk is with the government, who is responsible for ensuring that the project is carried out effectively and operates successfully with many guarantees involved. 
19. We were told of all the benefits by 2060 but what will happen to the debts of the operating company then and will there be a bailout? As of today, we have yet to decide on development model but can already foresee the financial benefits then. 

All the talks have been about potentials but are the assumptions realistic and achievable.  

Let’s learn from others.

Jakarta-Bandung HSR is a hit with passengers but faces significant financial challenges with lower-than-expected ridership, leading to operating losses and increasing debt burden.

Spain’s HSR network faces technical problems with new trains, copper theft, financial viability concerns and poor management of disruptions – sounds familiar!

China’s HSR network faces major issues (massive debts, financial losses, poor last-mile links and environmental inequality) but serves political goals like driving land values and steel demand up. It was never about making money but creating artificial, debt-funded demand to handle what would otherwise be an oversupply of Chinese steel.

Recent research using Chinese provincial data, suggests HSR can aggravate regional environmental inequality by facilitating the transfer of polluting activities from developed to underdeveloped regions.

How much do speed and convenience in “conquering distance” truly contribute to human happiness when last-mile connectivity and rush-hour congestion still rules. The Concorde supersonic aircraft was also based on speed!

I am not totally against the project but what is needed is a wholistic systematic thinking rather than determining time-saving and development projects based on target-driven logic; to find sustainable solutions by seeing the broader context.

Lastly, is HSR a gamechanger or slave of circumstances? We’ve had five PMs including Najib and HSR is still work-in-progress. How many more highlevel discussions do we need sans working-level formal bilateral discussions and negotiations to arrive at the desired results?

For the moment, let’s have popcorn and go watch a movie.

What say you…

 

Saleh Mohammed