- Malaysia's Land Public Transport Commission (SPAD) and Singapore's Land Transport Authority (LTA) have jointly issued a Request for Information (RFI) exercise on the Kuala Lumpur Singapore High Speed Rail (KL Singapore HSR) project.

- It serves as a consultative platform to gauge the market’s interest and collate industry feedback on both the commercial as well as technical expects of this massive project.

- Any feedback received will be fed into ongoing bilateral discussions between Malaysia and Singapore, and subsequently, the formal tender process.

- The KL HSR route is supposed to reduce the journey time between Malaysia and Singapore to just 90 minutes. The project was first announced by the Prime Ministers of both countries during the Malaysia-Singapore Leaders’ Retreat in February 2013.

- The location of the terminus stations had earlier been identified. Singapore’s terminus station will be located at Jurong East, while Bandar Malaysia has been chosen on the other side.

- Bandar Malaysia is also one of seven stations in Malaysia that have been identified. The other six are Putrajaya, Seremban (Negeri Sembilan), Ayer Keroh (Malacca), Muar, Batu Pahat and Nusajaya (Johor).

- The Malaysian government had reportedly approved state-backed MyHSR Corp to act as the project delivery company that will help oversee Malaysia’s portion of the KL Singapore HSR project.

- More importantly, the RFI exercise marks the next phase of the project. However, we believe it is still too early for any positive impact to cascade down to the Malaysian contractors at this juncture.

- Not least, it was reported in May that the opening date for this new high speed rail line has been pushed back from the original 2020 target.

- We understand that it takes one year each to complete the design and tendering process. On the other hand, construction works would take another five years to complete.

- Apart from the cost, we believe land acquisitions and finding the right financial model are key considerations in evaluating the project’s viability.

- In any case, the resurgence of newsflow in recent weeks may re-ignite sentiment on the construction sector moving into 1H15. Along with the LRT 3 and MRT Line 2, there has been renewed progress on the Damansara-Shah Alam Elevated Expressway (DASH) and Sg.Besi-Ulu Kelang Elevated Expressway (SUKE).

Source: AmeSecurities Research - 8 Oct 2015