Sat, Jan 02, 2021 – 5:50 AM
THE termination of the Kuala Lumpur-Singapore Excessive Velocity Rail (HSR) undertaking is a lose-lose scenario for Singapore and Malaysia, given the mutual advantages for varied financial sectors and potential for the change of concepts, mentioned observers.
However regardless of each governments failing to succeed in an settlement by the Dec 31 deadline, the undertaking’s termination is unlikely to have a big affect on bilateral ties. Observers famous the 2 international locations’ deep interdependency and constructive alerts from the coordinated efforts throughout the Covid-19 pandemic.
Given the excessive expectations driving on the HSR undertaking, Maybank Kim Eng senior economist Chua Hak Bin referred to as the termination “an enormous disappointment” and setback for larger financial integration.
“The excessive velocity rail would have created new alternatives and development in lots of areas, together with tourism, provide chains and retail. It might have additionally allowed each international locations to leverage extra readily on one another’s labour markets for particular abilities and expertise,” mentioned Mr Chua.
In a joint assertion on Friday morning, Prime Minister Lee Hsien Loong and his Malaysian counterpart Muhyiddin Yassin mentioned that in mild of the Covid-19 pandemic on the Malaysian financial system, Malaysia’s authorities had proposed a number of adjustments to the HSR undertaking.
Although a number of discussions have been performed with regard to those adjustments, each events had not been capable of attain an settlement, the assertion mentioned.
Singapore’s Ministry of Transport mentioned Malaysia, in accordance with the settlement, has to compensate Singapore for prices already incurred for the HSR undertaking.
Woo Jun Jie, a senior analysis fellow on the Nationwide College of Singapore’s (NUS) Institute of Coverage Research, mentioned the HSR undertaking might have served as a possible mannequin and platform for different future bilateral cooperation.
However he cautioned in opposition to overplaying its affect on Singapore-Malaysia relations, on condition that the 2 international locations have a deep, multifaceted historic relationship.
“Given our proximity and historic relations, the 2 international locations will inevitably proceed to be extremely interdependent for tourism, labour and regional developments,” he mentioned. “Even with out the HSR, there’ll nonetheless be robust mutual demand for tourism. Malaysian staff will proceed to see Singapore as a land of alternatives for them.”
Walter Theseira, a transport economist on the Singapore College of Social Sciences, famous that the undertaking was terminated in a means that didn’t seem acrimonious. Each events seem to have come to a mutual settlement. “I feel it offers confidence to Singaporeans, Malaysians and buyers that each international locations will proceed to cooperate in different areas of their bilateral relationship,” mentioned Prof Theseira.
For example, the event of the Fast Transit System (RTS) Hyperlink between Johor Bahru and Singapore is anticipated to proceed, he mentioned.
Malaysia’s transport minister in November gave his assurance that the 4km RTS Hyperlink might be accomplished throughout the stipulated time-frame, by 2026. It’s estimated that the journey between Bukit Chagar station in Johor and Woodlands North station in Singapore will take 5 minutes.
Prof Theseira added that Singaporeans ought to take coronary heart from the truth that even within the midst of the pandemic, each international locations saved the cross border move of vital provides going. Preparations have been additionally made to facilitate the motion of staff so far as attainable.
“That’s noteworthy . . . there are various locations all over the world that, throughout Covid-19, shut down borders solely, which led to large issues with provide chains.”
Within the short-term although, the HSR termination is more likely to be a disappointment to firms which may have benefitted from the undertaking tenders.
“The direct affect might be on building and retail, which have misplaced enterprise alternatives. However there are additionally oblique multiplicative spillovers to different sectors all through the financial system,” mentioned Lawrence Loh, an affiliate professor at NUS Enterprise Faculty. Prof Loh additionally famous the affect on the setting, on condition that continued excessive volumes of air journey between Singapore and Malaysia – one of many busiest worldwide routes on the earth – will go away a big carbon footprint.
Belongings with values which have priced within the expectation of a profitable HSR undertaking might be impacted as nicely, mentioned DBS senior economist Irvin Seah. Nevertheless, Mr Seah famous that buyers ought to have thought of the dangers because the undertaking bumped into roadblocks in mid-2018.
Actually, the announcement on Friday morning won’t have come as a shock to some. Malaysian information retailers, based mostly on info from sources, reported in December that Malaysia supposed to construct the HSR with out Singapore and finish the road in Johor Bahru.
Maybank Kim Eng’s Mr Chua mentioned a fast-speed rail that stops in Johor and never Singapore shouldn’t be more likely to be financially viable and may find yourself as a drain on authorities sources.
“Only a few high-speed trains are literally financially viable on the earth. Often these connecting two main cities, together with Tokyo-Osaka and New York-Boston, are. A Singapore-Kuala Lumpur excessive velocity prepare will make much more monetary sense, particularly given the spillovers to the broader financial system, than a KL-JB excessive velocity prepare,” he mentioned.
Prof Theseira mentioned the primary problem is that rail shouldn’t be aggressive with highway for brief distances, and never aggressive with air journey for lengthy distances – even excessive velocity rail. Singapore to Kuala Lumpur was a candy spot.
“So I do suppose it’ll battle by way of price restoration and sustainability. However once more, there are various parameters, and it actually does rely upon the choices you wish to make relating to the velocity and the price of the community,” he mentioned.