"WE will bid for Malaysian high-speed," a rolling sign boldly informs shoppers at an exhibition of Korean high-speed rail technology in a mall adjacent to Kuala Lumpur Central station. At another nearby mall, a Japanese exhibition makes the case for bringing Shinkansen technology to the Malay Peninsula. This publicity drive reflects burgeoning international interest in the Kuala Lumpur - Singapore high-speed line, a major bilateral project which, after several years of negotiations, is now poised for the start of what looks set to be a very competitive procurement process.
Malaysia's prime minister Mr Najib Razak confirmed on May 17 that he expects to sign a memorandum of understanding (MoU) with his Singaporean counterpart Mr Lee Hsien Loong early next month setting out conditions for the financing, construction, and operation of the 330km railway, which supports the objectives of Malaysia's Economic Transformation Programme (ETP).
"Talks with Singapore are ongoing but we are in the final leg with only a few minor issues outstanding," Mr Mohd Nur Ismal bin Mohamed Kamal, CEO of Malaysian high-speed rail authority, MyHSR Corporation, told IRJ in London on May 18. "The MoU will cover all major headings including technology, safety, regulation, and procurement, determining how the contracts will be organised. We want to do it in a way that encourages competitive international bidding and both sides want to see good value in the bids. We're open about gathering intelligence from the market."
The funding structure for the project is currently being finalised and an announcement on the agreed division of costs and revenue risk is expected after the signing of the MoU. "This has to be done in a way that properly apportions risk between the two countries," Ismal says. "We have an estimate in mind for the costs and we are quite clear on how to share the cost of civil works, although the revenue side is less clear. Both governments want a win-win agreement for their people, but there are many more similarities than differences between the two sides."
The MoU will provide a foundation for a binding bilateral treaty on the project, which is likely to be signed at the end of the year.
The line will start at a new station in Kuala Lumpur as part of the 197-hectare Bandar Malaysia urban development project, which utilises the site of a former airport. In addition to high-speed services the station will be served by two MRT lines and KTM Kommuter services and an extension of the Klia Ekspres airport rail link is also being considered. From Bandar Malaysia the high-speed line will run south via Seremban, Melaka, Muar, Batu Pahat, and Nusajaya before terminating at Jurong East in western Singapore. MyHSR envisages a design speed of 350km/h for the 330km line.
"The alignment has been more-or-less identified," Ismal says. "When we get the go-ahead we will start land acquisition, which will probably begin early next year. We are working with state governments to get the necessary approvals for this."
Trains will operate at 15-minute intervals with a mixture of non-stop express services and stopping trains, which will serve the line's intermediate stations. The journey time for express services will be around 90 minutes, with stopping trains completing the trip in around two hours. Malaysia's Land Public Transport Commission (Spad) estimates that the total city-centre-to-city-centre travel time would be 2h 30min, including 15 minutes for immigration, 15 minutes for arrival, and 15 minutes for transit connections at either end of the route.
High-speed rail is therefore expected to shave two hours off the fastest centre-to-centre journey times by air. Spad calculates that the current journey time by rail is around nine-and-a-half hours, allowing 15 minutes between Kuala Lumpur city centre and Kuala Lumpur Central station, a 15-minute wait for a train, four hours travelling time, 15 minutes for immigration at the Singaporean border, and 45 minutes to reach the business district by metro from Woodlands station. The bus takes around six-and-a-half hours, including an hour for immigration, while the journey by air including transfers is around four hours.
Ridership on the high-speed line is forecast to reach 22 million passengers a year within a decade of the start of operations and the project is expected to have a dramatic impact on the economies of towns and cities along the route. "Kuala Lumpur and Singapore are viewed globally as two separate cities so they compete for investment," Ismal says. "Much shorter journey time means closer integration and the region becomes a mega city from the point of view of investors. Intermediate stations will be 30 minutes to 1 hour from Singapore and Kuala Lumpur, which will undoubtedly attract investment. We foresee new industries and new economic activity mushrooming along the corridor."
In February 2013 the two countries agreed a target launch date of 2020, but given the scale and complexity of the project, the announcement in May 2015 that a revised timeline was being explored came as little surprise. "The project is going to be a lot more challenging than we originally thought, but it's a blessing that we understand this," Ismal says. "There's no point rushing into decisions that you will have to live with for 100 years or more. It's important that we build something that achieves its objectives in a cost-effective way while being a safe, efficient, world-class railway."
Another challenge will be securing the resources needed for such a large project at a time of significant investment in the conventional network and expansion of the urban rail system in Kuala Lumpur. "There are a lot of rail projects happening at the same time in Malaysia so there will be competition for resources," Ismal says. "We're approaching this issue in a way that doesn't create negative cost impacts for the high-speed project. Contractors tell us anything can be done, but we're looking at all projects, particularly those that are resource-intensive, to coordinate activity and smooth the demand."
In September 2015 the Malaysian government founded MyHSR Corporation, a public company under the ownership of the Ministry of Finance, to be the project developer and asset owner of the project on the Malaysian side. Initially MyHSR employed around 30 staff, but the organisation is now building up its technical expertise in preparation for the procurement and implementation phases.
In recent months MyHSR has also consulted with high-speed infrastructure managers and operators around the world. "International best practice is important because other countries have done a lot that we can learn from," Ismal says. "Companies we have visited in Japan, China, Korea, Britain, Germany, France and Spain have been extremely helpful and forthcoming in sharing information."
MyHSR and Spad are working closely with Singapore Land Transport Authority (LTA) and Singapore's Ministry of Transport to develop a procurement structure for the project, which will be formalised in the MoU. Last October Spad and LTA launched a joint market sensing exercise to seek feedback from the industry on technical and commercial aspects of the project and to gauge market interest. The consultation generated 98 responses, which have been used to refine the procurement structure for the project.
"The MoU will determine how contracting is organised," Ismal says. "We want to do it in a way that encourages competitive international bidding. We've been open about gathering intelligence from the market and learning from the interested parties - we are keen to avoid a situation where only one or two companies submit bids."
The desire to secure value through competition is reiterated by Spad. "From the government's perspective we need to get the best value-for-money, but safe and reliable system running for high-speed rail," says Spad CEO Mr Mohd Azharuddin Bin Mat Sah. We will go to an open tender process, that essentially enables all parties - the Japanese, Chinese, Koreans, even European parties - to come here and bid. "We have not made any decision, but we will not follow Indonesia's approach to developing high-speed rail between Jakarta and Bandung. In Malaysia we will keep it open and we are waiting for the best deal to come to our table."
MyHSR is keen to ensure excellence in operations as well as engineering, and it is seeking an experienced partner to run the trains. "Our current thinking is to appoint an established operator, because we want to ensure a fantastic customer experience," Ismal says. "The need to travel will be there whatever happens, but we don't want the standard of operations to detract from the desire to travel by train. People will choose to take the train if it is done properly."
Beyond the start of operation, Ismal hopes the project will leave a lasting skills legacy, giving Malaysia expertise in high-speed rail with potential applications in other countries. "Procurement includes offset programmes, which will instil and develop capacity and skills locally," Ismal says. "It's more effective for suppliers to bring in Malaysians and develop their skills for the longer-term. There are a few Malaysian companies, such as Prasarana, that already export operating expertise around the world, and we hope that we can do the same in high-speed rail in the future. High-speed rail is no longer a luxury project for developed countries, but a development project for developing countries. Early adopters will have opportunities to export the skills they gather."