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Why is the Government scrapping KL-SG High Speed Rail? Many people asked

savemalaysia
Publish date: Tue, 29 May 2018, 10:48 PM
In 2016, Mkini business editor P Gunasegaran has written a fantastic piece about why we couldn’t afford this costly “toy”. I have debated in Parliament using some of his points when HSR was hotly debated. 
 
He wrote: The project cost is about two times the Education Ministry’s budget allocation of RM41 billion for 2016. Just imagine the number of schools and universities we can build and the teachers we can train. Sacrifice all that for a faster way to get to Singapore? Whatever for?
 
He gave 10 reasons why Malaysia couldn’t afford the HSR. Read here:
 
Latest reports indicate that the RM40-80 billion, 90-minute, high-speed rail (HSR) link between Kuala Lumpur and Singapore will likely go ahead. But before we take that final leap and plunge ourselves into another needless orgy of lascivious spending we can ill afford, let us remind ourselves why we really, really don’t need this.
 
Here are 10 reasons why we should can this unfeasible, money-wasting (perhaps for a few, money-earning), uneconomic, grandiose invention of those who merely want to create a large contract and benefit from its largesse, once and for all. Consign it to the dustbin where it should remain until circumstances are so different that it warrants a re-look.
 
1. It is very costly. The cost is mostly estimated at RM40 billion. But if it is to be finished only in 2026 - 10 years from now - expect it to at least double. You can bet that the cost will be at least RM80 billion - that’s nearly two times 1MDB’s last-published total liabilities of RM42 billion.
 
And it’s about two times the Education Ministry’s budget allocation of RM41 billion for 2016. Just imagine the number of schools and universities we can build and the teachers we can train. Sacrifice all that for a faster way to get to Singapore? Whatever for?
 
2. It is unfeasible. For the project to be feasible and bankable, let’s assume a 7 percent return on project cost. That’s RM5.6 billion - in profit! Assuming a high 20 percent margin, revenue needs to be RM28 billion for that kind of profit. Assuming a ticket cost of RM200 one-way (who is going to pay more?), that will be 140 million trips a year or 384,000 trips a day, a physical impossibility!
 
That’s a fifth of Kuala Lumpur’s population going to and coming back from Singapore every day of the year. And just for perspective, Malaysia’s tourist arrivals last year were under 26 million. Yes, we know it’s 10 years down the line. But does anyone think that by then, demand would have risen so much to make the service feasible? Surely not!
 
That means expensive, and I mean expensive, government guarantees now and massive subsidies in future. 1MDB will begin to look paltry by comparison.
 
3. It is uneconomic. Oh, yes, they will justify the economic benefits by saying that millions of Singaporeans will visit Malaysia (aren’t they visiting already?), carry valuable Singaporean dollars, shop heavily, stay in our hotels, and buy real estate here (forcing prices to go up further - how is that beneficial to Malaysians?) and lead to a boom in Kuala Lumpur. But what if more traffic moves in the opposite direction.
 
Rich Malaysians - and there are many of them and the only ones who will be able to afford seats on HSR - will likely run to their playground across the Causeway and spend sizeable amounts of our foreign exchange there while depositing some too in Singapore bank accounts.
 
4. It will benefit Singapore more. Ever wondered why Singapore is agreeable to this project? Yes, it is a pipeline to take Malaysians into Singapore built mainly at Malaysia’s expense.
 
If reports are to be believed, Singapore will bear the cost for only its side of the venture. That means for a fraction of the total cost of the project, Singapore can get a project that is valuable to it. Studies have shown the more developed area benefits from high-speed connectivity between two centres with more people going to the more developed area than in the reverse direction.
 
5. There are alternatives. Air travel is already pretty fast. If you reduce check-in time before flight to 15 minutes, use Subang as an airport, provide connectivity to Subang from the city centre, say, 20 minutes, it’s 35 minutes before you are on a plane to Singapore. Add 35 minutes of flight time, and you are landing in Singapore 70 minutes later, with 20 minutes to the city centre there. That’s 90 minutes.
 
Or if you want to be drastic, remember we have an airport in town, yes, the old Air Force base in Sungai Besi. Take 20 minutes off for travel between the Kuala Lumpur city centre and Subang, and you get to Singapore in 70 minutes! Faster than HSR! And the capital is a mere cost of a terminal and a runway. Even if we use the overinflated cost of KLIA2 as comparison, that won’t exceed RM5 billion. And it can be done in a year!
 
6. Give a chance for RM30 billon double-tracking to work. Malaysia under Dr Mahathir Mohamad’s administration spent, and is spending, some RM30 billion in double tracking, which will enable trains to move in both directions simultaneously and move at up to 160km per hour.
 
For an express train, that could cut travelling time between Kuala Lumpur to Johor Baru to a mere 100 minutes. And from there connect to Singapore. And it would be cheap too compared to HSR prices. Does a few minutes difference in travel times cost as much as RM80 billion? No!
 
7. An HSR to Johor Baru/Penang is preferable. An HSR link may (the operative word is “may”) at some point help but it should be within the country to improve connectivity within, not without.
 
It makes sense to link Penang and Johor Baru via HSR to KL - if it is feasible, economic and desirable at this stage. But with double-tracking, it is really needless at this time. Even before we had an opportunity to realise benefits from double-tracking (we have not yet by a long way), we are thinking in terms of HSR. How short-sighted!
 
8. There’s plenty of opportunity for corruption and patronage. There are opportunities galore for patronage and corruption along the way for HSR, which is why it is being proposed in the first place. Inflating project costs to way beyond market levels will add to expenses which will make it even more difficult to make the project feasible.
 
9. Current government is incapable of handling such a project. Remember that the current government and its leader were directly responsible for 1MDB, which could result in losses of as high as RM28 billion to the country through allegedly outright pilferage and more if you include the costs of bond mispricing and overpayment for assets.
 
How can you trust it to undertake a project of this size without putting the country at grave risk and enabling its leaders and cronies to get rich?
 
10. That 90 minutes is not real. Remember, you have to get to the HSR terminal first at the old Air Force base in Sungai Besi. That is some way from the town centre. Add 15 minutes. And remember too that the Singapore terminus is in Jurong East. Add another 15 minutes at least to the town centre. That makes it two hours, not 90 minutes. And you could make that two hours easily if you have an airport in town as outlined in point 5 above.
 
Let’s be real careful about this HSR. It is not what it is touted to be. It is nothing less than a horrible, nightmarishly-poor plan which is neither viable nor feasible on its own while economic benefits are dubious at best and cannot be substantiated.
 
But it is being dressed up to look as a great, visionary project which will bring enormous benefit to the country. But there is not even so much as a publication of a detailed feasibility report at all for the public to judge its desirability. There is only one reason why authorities push through such large projects - for the money that can be made from granting contracts.
 
The money can be enormous, make 1MDB minor in comparison, and set the country back years in terms of opportunity cost, which is likely to pass RM100 billion by the time the project is finished.
 
Just imagine what other things you can do with that RM100 billion instead of merely enabling travel to Singapore faster by a few minutes. What a colossal waste of money!
Discussions
1 person likes this. Showing 15 of 15 comments

qqq3

brilliant

2018-05-30 02:01

AlibabaChiam

Hutang banyak lagi mahu..hutang.
u think is free...tak untung...tunggu.laa..

2018-05-30 06:41

Karmareal

Well thought concise article from former Star editor, P. Gunasegaran, in the face of too many rubbish spam from singaporean calvin. The glaring quality made the latter look like a fool. Karma is real!

2018-05-30 07:34

AlibabaChiam

Singapore only build one station ..Malaysia buat many station Malaysia

2018-05-30 07:43

AlibabaChiam

Malaysia rugi banyak

2018-05-30 07:43

durian151

first major economic mistake by Harapan government if KL-SG HSR is scrapped for good.

2018-05-30 10:48

Hush77

if the HSR were to proceed.. and taking a RM 110 billion loan, say at 3.5% interest.. each year MOF or the msians have to pay around RM 4 billion..to service the bank interest alone..
i dont think the train can make them $4 billion a year of net profit..?
so if we dont want to pay via GST or others, then no need to argue..its a clear decision.
plus u have to see who negotiated the deal..its the previous corrupt BN regime.
i think msia can also explore other things in future....
Dr M can also call elon musk who is working on a "hyperloop" tube train and tunnel boring company.....the tube train can go to 1200 km per hour...and could be much cheaper...as it can also go underground and less land is needed.
hyperloop is still in experimental stage and may not carry a lot of weight like a train does...

2018-05-30 11:33

durian151

elon musk's tube train is not for good economic, but a technology dream good only for super rich country.

2018-05-30 12:01

durian151

a key reason average Malaysian is struggling financially is because of poor public transportation. most people can't live productively without a car. most household spend a big % of their income on car and maintenance. and most of these spending (petrol, car) are imported spending.

2018-05-30 12:07

durian151

Malaysia needs HSR connecting all major cities from JB to Sungai Petani
Malaysia needs efficient public bus services in all major cities like JB, MUAR, SEREMBAN, KL, Ipoh, BM, SP etc to eliminate car people can't afford.

2018-05-30 12:13

Junichiro

If no 1MDB scandal, maybe got $$$ to build HSR. Now, 1MDB has already put us into terrfic debt. How to take on more debt??? Jibby has one indispensible tool - GST. If BN had won, most ppl expect him to raise GST rate. It is a piggy bank to him. Just build. If no $$$ raise GST rate again.

2018-05-30 12:18

kelvin1

Don't simply talk something without proof to create chaos....Be rationale. Don't simply accuse.

2018-05-30 17:03

geraldt9

Viable or not, these known corrupted SCumno goons will approve anything, more especially multi RM billion projects or schemes through grossly inflated prices to fill up their ' extra deep ' pockets, along with their cronies companies. Can't see the performances of their cronies counters meh..??

2018-05-30 19:05

VenFx

Only th jibby say its good for the nation, for some reasons.

2018-05-30 23:26

shahbj

Agreed..1MDB scandal is stupid enough...why should we add up to the burden..simple calculation also will tell us HSR is feasible or not..thumps up mr p. gunasegaran...good job..

2018-05-31 23:07

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