- According to The Straits Times of Singapore, the locations of the seven proposed stops for the KL-Singapore High Speed Rail (HSR) project have been confirmed. They are KL, Putrajaya, Seremban (Negeri Sembilan), Ayer Keroh (Malacca), Muar, Batu Pahat as well as Nusajaya in Johor. The respective states – on which the line will pass through – have also given their consent.

- Malaysia has completed feasibility studies for the link. On the other hand, Singapore’s own feasibility study (320km-340km section) started in August and is currently ongoing.

- Quoting Malaysia’s Public Transport Chairman (SPAD) Tan Sri Dr Syed Hamid Albar, The Straits Times report however indicated that the exact locations of the terminals and other key details have to be firmed up before the project can proceed. The Star however reported in April that a site in the Bandar Malaysia project in Sg.Besi had been chosen as a terminal for the HSR link.

- Overall, the KL-Singapore HSR project is due to be completed by 2020, and will reportedly cost ~RM40bil. There is also a joint ministerial and technical committee being set up by both Malaysia and Singapore to facilitate this project. A key objective of the KL-Singapore HSR is to reduce travel time between KL and Singapore to ~90 minutes besides opening up new economic and development corridors along the HSR’s network.

- We draw comfort that progress on the KL-Singapore HSR is gradually gaining momentum, and underscore’s more prospects for rail-related jobs following news that the MRT2 and LRT3 projects will likely commence in 2015 as per Budget 2015.

- If the project takes on a Private Financing Initiative (PFI) mode, we believe Gamuda could be in the mix of things given its proven niche in executing high-impact rail projects and strong balance sheet. Previous press reports indicated that at least three bidders have shown interest in the project; i.e. UEM, MMC and YTL Corp.

- Suppliers of building materials, i.e. Ann Joo Resources, Lion Industries and Lafarge Malaysia stand to benefit from this multi-year project.

- Likewise, the project will be a long-term catalyst for Malaysian developers, particularly those that have visible landbanks in both KL and Johor. We count Mah Sing Group, IJM Land, WCT (via WCT Land), Gamuda (via Gamuda Land), UEM Sunrise and E&O as key beneficiaries. Likewise, IJM Land looks set to be benefit in Seremban – given its sizeable landbank within its well established Seremban 2/S2 Heights townships.

- All said, we believe it is still in the early days; the exact funding structure needs to first established before the HSR link is ready to take off, we believe.

Source: AmeSecurities