Risks, benefits of high-speed rail link need further scrutiny

I refer to the commentary “How to fund the Singapore-KL High Speed Rail” (Aug 5).

More clarity is needed on the economic and social justifications for such a project.

While travel time on the high-speed rail (HSR) would probably be reduced to 90 minutes a trip, the time taken for embarking, disembarking and clearing immigration is unknown. It could well take an hour.

The project is estimated to cost S$15 billion, assuming there is zero cost overrun — which Malaysia has experienced in other public projects.

To break even — just to finance annual borrowing costs (not the principal sum) — the HSR may need ridership of eight million, with tickets priced at around S$90 to S$110 per trip, to be economically feasible.

Malaysia’s Public Transport Commission chairman Mohd Nur Ismal Mohamed Kamal has said that a round trip from Kuala Lumpur to Singapore on the HSR link will cost users less than RM400 (S$142).

Until the ticket price is finalised, it is difficult to secure a buy-in from citizens. At current estimates of prices, the potential take-up rate from users has not been ascertained.

Time is needed to nurture the market, and the public-private partnership consortium could see “red” initially, for as long as decades. Of course, actual payback is also down to how they set the prices.

Also, there will be eight stations in Malaysia and one in Singapore. More information on how ownership of the stations will be structured would help provide clarity on how the project will be sustained.

We should also be mindful that alternative transport options are readily available and at lower cost.

For passengers who do not mind waiting, a single trip from Johor Bahru Central to Kuala Lumpur costs less than S$10. Coaches are also available frequently.

Until information on the infrastructure and operations of the HSR link is established, it remains to be seen what the benefits and risks of the project are.