KUALA LUMPUR – Former Audit Department principal examiner Gursharan Singh said that MRCB’s departure from the consortium could indicate that the GLC perceived the high-speed rail (HSR) project as potentially unviable after weighing the costs and benefits.
Highlighting several impracticalities with the project, Gursharan noted that claims suggesting the HSR could enable passengers to travel seamlessly between Kuala Lumpur and Singapore within 45 minutes are not entirely accurate.
Gursharan pointed out that passengers’ travel times between their homes and the station must take into account traffic conditions, weather and other factors.
“For some, their homes might be near to the station, while others may have longer travelling periods,” Gursharan said in an interview with Scoop.
Although many have cited the Jakarta-Bandung HSR as a success, Gursharan argued that this was due to the lack of viable travel alternatives between those two locations.
In a Facebook post on December 19, Gursharan called the withdrawal a “wise decision” as HSR has the potential of very high financial risk due to its high cost, especially if it is to be funded by borrowing which may further increase public debt with high interest which can escalated ue to various reasons.
“The expected time saving may be minimal especially when compared with existing highways and electrification of railways.
“Also, high fares for HSR may provide little incentive when compared with air fares and frequency of services,” he wrote, cautioning that HSR may become a white elephant costing hundreds of millions in taxpayers funds.
He said these would be compensation, payments and fees to professionals and other studies or services, and various other costs including remuneration packages of assigned civil service officials.
Gursharan, who has audited several transport infrastructure projects during his tenure with the Audit Department – including KTMB and HSR when YTL first proposed the HSR – emphasised that commuters in Malaysia have functional alternatives for travelling between Kuala Lumpur and Singapore.
“A flight between Kuala Lumpur and Singapore is approximately 45 minutes and if you take a low-cost carrier it could cost less than RM150 or RM100.
“Driving in on the PLUS Highway could allow you to travel within four or three and a half hours and it would be cheaper if you take an express bus.
“Keretapi Tanah Melayu Bhd’s electrified double track system is also already in operation with the last section between Gemas and Johor Bahru expected to be finalised and begin operations soon.
“If HSR tickets are high compared to current airfares, bus or using your own vehicle, then why would anyone choose to opt for an HSR trip,” Gursharan added.
Additionally, Gursharan mentioned that a Kuala Lumpur-Singapore HSR has been mooted since the 1980s, but it was shelved due to concerns over viability and costs.
In the 1980s, Gursharan said that the project was estimated to cost RM25 billion, which later rose to RM120 billion.
With current project costs estimated to vary between RM70 billion to RM120 billion now, Gursharan said more likely than not, the project proponent would have to borrow in order to fund the project.
“Now when you borrow, finance costs will go up. Plus you have to manage the project and operations, but who has the expertise?
“More likely than not, operations may have to involve expertise from overseas which can be expensive too.
“So, it’s possible that MRCB may have foreseen these issues leading them to pull out from the project,” Gursharan, who served in the Audit Department since the 1950s explained.
Last week, MRCB confirmed it is terminating a teaming agreement with a Berjaya Group-led consortium for the submission of a non-binding conceptual proposal to MyHSR Corporation Sdn Bhd to pursue other strategic opportunities.
According to reports, MRCB, which carries an AA-IS rating, likely withdrew from the multi-billion ringgit project given the massive financial risks the HSR might expose its shareholders, especially the Employees Provident Fund, the Retirement Fund Inc (KWAP) and Tabung Haji.
During former prime minister Datuk Seri Najib Razak’s tenure, Malaysia and Singapore formally agreed to the HSR project in February 2013 and was initially slated for completion within 13 years.
The HSR hoped to connect several key stations, namely Kuala Lumpur, Putrajaya, Negeri Sembilan, Melaka and Johor.
However, when Pakatan Harapan came into power in 2018 under Tun Dr Mahathir Mohamad’s leadership, the project was later terminated and Putrajaya had to pay Singapore SG$102.8mil for incurred costs.
While Transport Minister Anthony Loke stated that Putrajaya will make a decision on the HSR by early next year, Sabahkini2 suggested that Loke may face an uphill battle to convince Prime Minister Datuk Seri Anwar Ibrahim given his reluctance towards megaprojects. – December 24, 2024
