Thursday, April 16, 2009

Start the KL-Singapore Bullet Train Project Already!


The KL-Singapore bullet train project was mooted as far back as 2006. Till today, nothing came of it. Mark Mobius of Templeton Emerging Markets was in KL recently and was asked what were the competitive advantages or sectors that Malaysia had an edge in. He said, and I agreed, plantations and tourism. We are doing well enough in plantations, even though it appears only IOI Corp is moving up the entire value chain and integrating the processes vertically and horizontally - what are the other plantation companies doing? Many are still happy to be planting and harvesting then selling, there are plenty of value add processes to palm oil in order to transform them into various other uses. While we have our R&D in plantation, we still need to pump it up with a more open collaborative research institute to get at fresher ideas of how to further enhance the usage of palm oil. Why don't we give out 5 sponsored Phds for foreign students that do higher research in palm oil related studies every year, and give them 3 year stints after that at PORLA? Why don't we establish one or two chairs for renown research scientists in food/plant biology/ chemistry or related subjects within PORLA to further energise the unit. Don't just employ local research staffers, it stunts our way of thinking, you need a different perspective, a fresher way of looking at things all the time.

Now onto the second part, tourism, we have so much potential but its all over the place. We have tons of beaches, diving spots, natural rainforests, caves, etc... eco-tourism is the way forward. Only we have that kind of tourism, .... you can do your Disneyland or Universal Studio or casinos, those things can be transplanted anytime anywhere within a couple of years. We need a cohesive strategy to manage the operators, grade them continually, have a strong tourism police force to check and evaluate the operators, have a site that grades and allows access to all the licensed operators. Bad hats will be punished severely. The operators within a region will have to do their part with the help of Tourism Ministry to maintain the "essence, integrity and longevity" of the eco-toursim spots.

Now, for a tourist, they have to search in the dark, rely on recommendations from friends, to get to interesting places. Already we have such a strong platform, the best run and cheapest budget airline in Asia as a base.

The second idea, which is critical as well, is to build the Singapore-KL bullet train. It is best to extend the ERL line. Why sit on it for 3 years??? It is so viable and the multiplier effects will be fantastic. Malaysia has the cheapest 5 star hotels in Asia, period. Malaysia has the best food in Asia, period. Most of our neighbours love to come to visit, especially Singaporeans, but have you seen the weekend jams at the causeway? The difference in currency is also a strong power puller.

Imagine a trip from KL-Singapore taking 90 minutes, add 30 minutes for the wait and checking in and checking out. Two hours and you are in KL, can you imagine the crowd. Heck, you can be very profitable even by charging RM50-RM100 per one way trip, yes, you can rip the bus travel to shreds. If you add one stop at Melaka, well you know how many new hotels will be built around Melaka? It takes the stress out of driving.

The bullet train has multiplier effects on both cities because the project basically makes KL a suburb of Singapore, and Singapore a suburb of KL, you basically enlarged the urban population of both cities overnight. You will find on most days and probably weekends that 1/5 of the people having fun in that city will be from the other city. On special occasions, it will be even more pronounced.

On the business front, there are plenty of companies, especially foreign companies that will set up offices in KL instead of Singapore. With the bullet train, they could literally take the 7am train and start meeting clients in Singapore from 10am onwards, he/she could meet 4 clients and have lunch with one, do a bit of shopping and take the 6pm train back and still be home in KL by 9pm. All that for RM100??? Just the thought of relocating from Singapore to KL would save a company some two-thirds in costs immediately. There are plenty of these type of enhanced business contacts and privileges that comes with the bullet train project. Gawd! Its only RM8bn, it the oil subsidy bill for a few months!!! If you can afford the RM60bn stimulus bill, you can tag on another RM8bn that would have very strong long term multiplier benefits to many sectors of our economy. This is the exact kind of big projects that moves us UP THE VALUE CHAIN!!! This is exactly, what we need.

Don't worry about Singapore, they would be more than happy to participate. They are pragmatic enough, just that we are not. Such a project will need strong parties to pull this off as there are vested interests involved. I would suggest the following: YTL 40%; SIA 20%; MAS 20%; UEM 20%. Now why would I want UEM inside?

The bullet train project will be critical in jump starting the Nusajaya project as well. Right now, there are some people working in Singapore that travels daily to Singapore from Nusajaya. Can you imagine the flow on effects if there is a connecting line from Nusajaya???

Imagine this, there is an express train every hour from Kl-Singapore on the hour. Once every 3 hours, the train will stop at Melaka and Nusajaya, i.e. one in every 3 trains is not express. The Nusajaya line will be made up of a separate line on its own with 4 stations, each station will be attached to a huge parking area. These 4 stations will lead to Nusajaya. There will be a train running direct from Nusajaya to Singapore Raffles Place direct every 30 minutes during peak travel period, and reduces to 1 hour on non-peak.

Watch the properties in Nusajaya being snapped up, watch the plethora of Singapore companies jumping to invest in other sectors in Nusajaya.

Sigh... another National Service , another idea that will not get me my datukship... another idea for free... wait it gets better, the second phase of the project will go north bound, half an hour for Ipoh-KL (gee, many might even move back to Ipoh to work in KL), one hour for KL-Penang (Singaporeans will laugh, 2.5 hours from Singapore-Penang, food glorious food), and the piece `de resistance... KL-Hatyai in 3 hours, which makes Singapore-Hatyai in just 5.5 hours ... The collective urbanisation of these cities will recharge the business activity in each and every city, it will in effect double, even triple the "population effect" of each city.


-----------------------
2006

KUALA LUMPUR: Imagine zipping in a bullet train from the KL Sentral station into the heart of Singapore in 90 minutes flat. That is something that will become a reality if tycoon Tan Sri Francis Yeoh’s plan to build and operate such a train service at a cost of up to RM8 billion takes off.

Yeoh told the New Straits Times that the Malaysian and Singapore Governments had been informed of the proposal by YTL Corp for the fast train service.

If approved, the project will become the largest to be launched on a private finance initiative (PFI) basis, as encouraged under the Ninth Malaysia Plan.

Construction will take three years but it could be two years before cross-border approvals and land acquisition are obtained.

Yeoh said that if the project is approved, YTL would go to the global capital market to raise the needed funds to finance it. Partners providing the rail and train technology for the project could be either Japanese, French or German operators of fast train services.

"Every single fund manager loves this project and a lot of consumers want it. The industries want it. It’s a no-brainer. It’s the perfect alternative to air and land transport between the two hubs and will integrate them," he said.

"This is not a dream and a project that can’t be done. It can be done if there is a will to do it. And I pray that there will be this will to do it," he said.

"It will help move the economy ahead. The country now needs the boost of fresh private sector investment and we can do that with projects like this."

Yeoh said the KL-Singapore fast rail link could be an extension of the Sentral-Kuala Lumpur International Airport train service that is currently operated by YTL majority-owned Express Rail Link (ERL).

The ERL was built at a cheap cost of RM35 million per kilometre compared to other train projects in the developed world built at between RM120-RM150 million per kilometre. The ERL project received no government subsidies.

"We can extend the airport line to Singapore. We can also find ways for the rail link to pass through the newly developing southern Johor Corridor enroute to Singapore," he added.

Under the YTL proposal, a new standard gauge railway line would have to be built across the southern states to accommodate trains with wider wheels that can travel at a speed of up to 350km per hour.

The metre-gauge railway lines currently used by Keretapi Tanah Melayu (KTM) can only accommodate trains with a smaller wheel size and a maximum speed of 140 km per hour.

Yeoh said the timing was just right for the launch of the project now as the Malaysian Government was keen on it and the cost of land acquisition to build the rail connection was relatively cheap.

Land cost usually accounts for 70 per cent of the cost of such rail projects while the cost for the technology accounts for 30 per cent.

"It is the land value that is important. The land cost is still affordable now in Malaysia, unlike in Hong Kong, the US or Europe."

Yeoh said Singapore has also had a look at the project.

"I don’t think they will be that difficult. We have been chatting with them for quite a while now."

Yeoh said he was ready to accept Malaysia Airlines and Singapore Airlines as well as the airport operators of both cities as "cornerstone investors" in the project to ensure relevant entities from both sides had a stake in the project.

The direct rail link will provide commuters with an alternative to expensive air travel and the slower journey by car or bus.



p/s photos: Yukie Nakama



20 comments:

Tun Marvin said...

Would that just materialize what the Johore MB and his party feared most :- the colonization of Johore by Singaporeans ?

clk said...

Well, in M'sia, many projects are seldom launched with the general economic benefits in mind. The real reasons are usually; who gets the project?, will the Airlines/ MAB suffer?, who can buy the real estate next to the project?, how much soft-loan can one get? which route should it pass? whose constituency should it stop at? and other related questions.

If pure business economics consideration are our way of life, we'll have beaten the red-dot down south flat out economically by today.

siacw said...

if 50km ERL they charge the trip for RM35, 300km KL-SIN route they would at least charging at more than RM200.

Present Value said...

"Natuk" Dali,

One of your best value-added articles to the Nation over recent months of political and economic turmoil!

This RM8bil proposal will certainly caused more headache to those vested parties, and only a good great leader will be able to drive this project through for the greater economic and "life-style" benefits of millions of citizens of both country.

If our NEW leadership can see such projects from this perspective and award the projects, plus sub-contracts in a fairly transparent and efficient manner - then we are investing good $$$ for a better future with competitive edge and people's life would be enriched with less unproductive time in-queue while "travelling".

Raison D'etre said...

MF,

You reckoned without reckoning (heh) the contrasting interest of at least three main players close to the Gomen: PLUS, Air Asia and/or Mas.

Imagine what a hi-speed train going up and down the Peninsular (why stop at KL, extend leih...) would do to their margins.

I'm all for it, though.

Would make it easier to go to Spore to buy stuffs cheaper there even with the current cutthroat exchange rate.

Superman said...

tourism is really the sector that can expand and earn a lot of money for the government and private sectors. Look at Thailand, Indonesia and Vietnam are promoting tourism so hard now yet Malaysia still not doing much.

Arn said...

aiyaaa... sifu, don't get our hopes up lah... not holding my breath anymore for our useless gomen to do anything approaching visionary... we could have this but what do they want to revive?

ANSWER: CROOKED BRIDGE!!!

HollyS said...

I heard from my inside contacts that this project has been revived and should be approved in due course. Just wait and see.

Shadow said...

Just a comment on one of the minor point about PORLA's research. I am not convinced that the issue lies with foreign or local PHD being hired as researchers but more on how successful research is being rolled out commercially. I understand that some of the researchers quit their jobs after achieving some level of results to be private consultants, bringing their work with them and enriching themselves along the way. The issue probably has a lot more to do with financial remunerations for the researchers, etc. Not exactly something we want to dwell into here.

Yvonne said...

dear Dali,

would you consider changing the colour scheme? My eyes feels like popping out trying to read your postings.

chanyip said...

make msia 1st to start off with!!

AhBeng said...

Totally agree with you on the benefits and multiplier effect to the economy. however, i think the greater risk will be on the execution of the project. first of all, is the project really financially viable? I believe for such big project to turn profitable, u will need at least a few years to ramp up the demand.. and during the loss making period, can the operator survive? this reminds me of malaysia airports, where they have to pay RM5 to ERL for EVERY international passenger departing from KLIA, even for those who did not use the ERL. And because of this, now our government is compensating malaysia airports for this RM5 under the recently announced malaysia airport retructuring scheme. And guess what.. this money is from the taxpayer! on top of that, the project is too important to fail, and I can forsee our government bailing out the company one day, if it fails. This is exactly what happened to our LRT systems.. remember Star and Putra LRT? And this again will involve our money! Honestly, i would oppose the project, as i don't believe such project can be 100% privately financed and run, no matter what the company claims..

penthet said...

Odd blog but I like it.

Big Bad Wolf said...

To suggest that MAS and SIA taking part in the venture, tat is a pretty crazy idea! Both of them are in airline business, so why woudl they want to support something that is a direct threat to their business? If the bullet train business proposal really take off, i bet the KL-Sg flight route would be affected very badly. And i think both airlines would not want to lose this business.

But i do agree with you that malaysia has a lot of potential to be a tourist spot, especially in the area of eco-tourism. But sadly, the gov only knows how to commercialize the tourist spots. Sigh..

Salvatore_Dali said...

bigbadwolf,

i guess u r not so big or bad or even a wolf then... the main reasons why the bullet trains did not get approval is the VESTED interest and lobbying by MAS which has the most to lose... hence u invite them in to push through the proposal... what they lose out, they may gain a bit through the new venture... i thot it was a pretty obvious strategy

China said...

Who wants to take a 1.5 hour train ride (which exclude the travel and waiting time to and fro the train stations) when you can drive the whole family with food, drinks, luggages and shoppings from Sg to KL door to door in less than 4 hours even when you are observing the legal speed limit.

Salvatore_Dali said...

china,

- the guy who does not want to spend 4 hrs driving, paying tolls, petrol but arrive in KL fresh n ready to party
- the guy who want to go to KL or Sg for 3 meetings in a day n be back the same day
- the guy who does not want to get stuck in causeways for more than half an hour each way

the only reasonable thing is if u r going to jb to shop for groceries... i dont think ppl drive up to kl to shop for groceries... which means u do not need the car

solomon said...

In Red Cliff show, Chu Ke Liang borrows the wind to overcome Zhou Yi. In this case, if the Authorities can overcome their own ego, the bullet train could be the "wind" as well.

But by not offending Singaporean, we should also offer our neighbour to participate together.

Even in China and US, they are building railways as they expand their infra.

Big Bad Wolf said...

@ salvadore,

Do you think a company which owns a monopoly business would want to see this getting killed?
Any business will fight until all avenue are exhausted if their monopoly business is jeopardized, especially MAS and the SG-KL route. Well too bad for them, as both the gov intervene and eventually was opened to both low cost airlines (Airasia and tiger)

"what they lose out, they may gain a bit through the new venture", you say..
so, the JV is actually a consolation prize eh?
Pretty insulting to Idris Jala, i say. LOL..

China said...

Re Salvatore's reply,
That guy should just fly, even Air Asia will be faster than the train and then he will be wondering around KLIA or Changi waiting for taxis. Door to door is the way. Train is for the masses not the niche business travelers, who would prefer to fly 1st class even for 45 minutes.