KUALA LUMPUR: THE Kuala Lumpur-Singapore High-Speed Rail (HSR) project, if revived, will not only elevate the status of Malaysia and the republic as major tourism hubs, it will also make the countries preferred destinations for the international business community.

An economist said the HSR would enhance connectivity between Southeast Asian countries, subsequently boosting the competitiveness and resilience of the Asean Economic Community.

Sunway University economist Dr Yeah Kim Leng said it had always been Malaysia's ambition to have the HSR as it was in line with efforts to modernise the transportation infrastructure.

"I think that is the way to go since it will help attract international tourists and business travellers to the two major hubs. 

"The HSR will not only help the two countries become desired destinations for international travellers, but also destinations for multinational companies to set up their headquarters."

Indonesia is mulling building an HSR, while a similar project is under construction in Thailand. Laos and Cambodia, with help from China, are also establishing a railway link.

Yeah said the Kuala Lumpur-Singapore HSR would enhance connectivity in the Southeast Asia region.

"The Asean Economic Community will become more integrated with the transport link."

Associate Professor Dr Aimi Zulhazmi Abdul Rashid, an economic analyst from the Business School of Universiti Kuala Lumpur, said the HSR would bring short- and long-term economic spillovers.

He said a mega project on the scale of the HSR would be a great economic catalyst for Malaysia and would help sustain the economic recovery momentum as the country moved into the Covid-19 endemic phase.

"It will have a positive effect for those involved in the supply value chain, such as the supply of raw materials and manpower, property values around the strategically selected stations will increase, and demand for food and shelter and consumer spending will go up even before construction begins.

"Various classes of contractors will get new opportunities and the demand for labour will also increase.

"What is more pertinent, the economy is going through a difficult period and is in need of mega projects to be the driver of economic recovery.

He said the HSR would connect the two largest economic areas in the peninsula — the Klang Valley with Johor and Singapore.

Aimi Zulhazmi said the HSR project could also be a great catalyst for other sectors, such as the food industry, retail, education, tourism, raw material supply, transportation, logistics and information technology.

Both economists had concerns over the cost of the project.

Aimi Zulhazmi said: "Construction costs are high and has continued to increase since Covid-19 struck the country.

"There has been a sharp increase in construction costs and the cost of materials such as iron, cement, sand and so on. The project's cost projections needs to be examined in more depth.

"Moreover, the government's debt is increasing due to various fiscal policies that have been and are being implemented, such as stimulus packages worth RM530 billion, assistance programmes and a large national budget for 2021 and 2022, amounting to RM320 billion and RM330.1 billion, respectively."

He suggested the government pursue public-private partnerships, such as BOT (build-operate-transfer) and BLT (build-lease-transfer), for the mega project.

"Fully private financing is more practical and logical."

He said if the project was offered to the private sector in phases — for example, starting with the Singapore-Kuala Lumpur portion, then extending the rail to Penang and Bangkok in future — it would be an opportunity to attract foreign direct investments to the country.

"The economic impact of this will be very large, especially in construction and logistics."

During his first visit as prime minister to Singapore recently, Datuk Seri Ismail Sabri Yaakob expressed Malaysia's wish to revive discussion on the HSR project with Singapore.

His Singaporean counterpart, Lee Hsien Loong, said the republic was looking forward to fresh proposals from Malaysia on the HSR although both countries previously reached an agreement to terminate the project.

https://www.nst.com.my/news/nation/2021/12/750532/hsr-can-boost-tourism-business