HSR: When will the game change?
The announcement on Tuesday that the high-speed rail (HSR) terminus in Singapore will be sited at Jurong East immediately stirred investors’ interest. The HSR has been described by Singapore’s Prime Minister Lee Hsien Loong and his Malaysian counterpart Najib Razak as a game changer for the economic ties and passenger traffic links between the two countries.
The announcement on Tuesday that the high-speed rail (HSR) terminus in Singapore will be sited at Jurong East immediately stirred investors’ interest. The HSR has been described by Singapore’s Prime Minister Lee Hsien Loong and his Malaysian counterpart Najib Razak as a game changer for the economic ties and passenger traffic links between the two countries.
Positive for Changi Airport
The HSR could be a real game changer for Changi Airport’s passenger traffic. Currently, a traveller from Malacca or Muar going to Tokyo might make a two-hour road trip to Kuala Lumpur International Airport. But if we had the HSR today, the same traveller can choose to fly to Tokyo from Changi Airport, where there are 13 daily flights and a wide choice of departure times.
If Singapore’s transport planners could integrate the HSR terminus seamlessly with the existing Jurong East interchange, thousands of passengers per day from Malaysia will choose to take the HSR to Singapore, switch to an MRT to Changi Airport and then depart on non-stop flights to 126 cities around the world.
Alternatively, we could also have airport express coaches ferrying passengers from the HSR terminus in Jurong East to Changi Airport via the AYE/ECP.
Timeline delay
However, for those who are looking to buy properties in Jurong East because of the HSR, it is probably a little too early. We might see another one or two property cycles before the HSR will be operational in Jurong East.
The announcement by both countries’ Prime Ministers acknowledged that the original target completion date of 2020 was “unrealistic”. No new target completion date has been set and Mr Najib explained that construction could “take approximately five years, the design would take one year and the tender process probably would take another year”. Such disappointments could be avoided if the earlier announcements were tempered with more realistic estimates from all parties involved.
Even now, investors should not infer from Mr Najib’s explanation that the HSR will be operational in the year 2022. While the HSR track in Singapore may be about 15km long with just one station, and perhaps a depot, to be built, there are about 400km of tracks and at least seven stations that have to be constructed between Kuala Lumpur and Nusajaya.
And then there is the time required to raise sufficient funds, and it is no secret that the Malaysia government budget has been in deficit for several years. The budget for this giant infrastructure investment was previously estimated at RM40 billion (S$14.8 billion) and, depending on how the project is financed, it could add to the massive RM580 billion of existing government debt.
Furthermore, the HSR track is likely to run through four Malaysian states, and we should expect hurdles from compulsory land acquisitions with further delays from having to iron out resettlement issues and compensation for families and businesses affected. What about the budget for land acquisition, compensations and resettlements? To what extent will Malaysian taxpayers have to finance these activities?
Rapid Transit System (RTS) station in Johor
Meanwhile, the Malaysian authorities have not finalised the site for the RTS station that will connect to the Woodlands North station in Singapore. After so many years of planning and discussions, it is still unclear whether the connection will be via a bridge or a tunnel, or a combination of both. This is yet another disappointment for many property investors.
No new target has been set for the completion of this link. But we can be sure that the over-ambitious date of 2019 will be missed.
I have wished for Singapore and KL to have a bullet train service ever since I enjoyed the ease of travelling on the London-Paris Eurostar and on the Japanese Shinkansen network.
I really look forward to a speedy project completion. But our lofty expectations have been let down by the over-ambitious timelines announced over the past two years.
I hope that the authorities will set realistic target dates and not disappoint the stakeholders in both countries over the next decade. I doubt that the HSR will be completed and fully operational by 2022. My own guess is that it will start in 2025 at the earliest. As for the RTS, I think it could be operational by 2024.
For now, investors should hold their horses and not expect the game to change too soon.
ABOUT THE AUTHOR: Ku Swee Yong is a licensed real estate agent and the CEO of Century 21 Singapore. He recently published his third book “Real Estate Realities – Accommodating the Investment Needs of Today’s Society”.