More big infrastructure projects threatened by Malaysia’s HSR decision

Malaysia, Slider 31 May 2018
More big infrastructure projects threatened by Malaysia’s HSR decision

An analyst eyes the Woodlands-Johor Bahru Rapid Transit System and other proposed bridges.

As Malaysia decided to drop the Kuala Lumpur-Singapore High Speed Rail (HSR) project, some of Singapore’s plans for the upcoming Jurong Lake District (JLD) could have been foiled. However, this could not be the only development at stake.

BMI Research infrastructure analyst Christian Zhang told Singapore Business Review that future infrastructure projects between Malaysia and Singapore (like the Woodlands-Johor Bahru Rapid Transit System or proposed bridges) will almost certainly come under greater scrutiny by the Mahathir government, which could lead to reviews and potential cancellations.

“As with any multinational infrastructure projects, strong contracts, negotiations and strong political will on both sides will be essential for the success of future projects between the two countries,” he said.

Moreover, the HSR project also came with a slew of residential and commercial developments adjacent to the planned stations, even though the railway project itself does not include real estate.

“None of the planned stations (including the ones in Singapore and KL were actually in existing ‘city centres’, but intended as anchors for new commercial and residential hubs,” Chang said. “With the cancellation of the project, these surrounding real estate projects also face an uncertain future.”

However, Zhang would not rule out the cancellation of the HSR project. “There is certainly a need for a faster transport link between Singapore and KL – and the fact that Singapore-KL is supposedly one of the world’s busiest international air routes means there is a lot of potential demand for an HSR,” he said.

“What Mahathir is doing appears to be more of a political rather than an economic move; one possibility is that the project is eventually revived but in a form that is more politically (and fiscally) palatable, whether that’s scaling down the project or engaging more private investors,” he added.

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