BY Chris Prasad
A slight buzz has crept back into the lacklustre property market since Prime Minister Najib Razak and his Singapore counterpart Lee Hsien Loong signed the historic agreement to proceed with the KL-Singapore High-Speed Rail project on Dec 13.
More than a huge step in bilateral ties, it has been billed as a monumental economic game changer for both countries which is likely to spur a higher volume of cross-border business opportunities.
Prime Minister Lee pointed out that the Singapore-Malysia border is already one of the busiest in the world, therefore the implications of the HSR for tourism and business travel alone are huge.
The question from a construction and property development perspective, however, is will HSR turn the sector’s dismal fortunes around – and how quickly will it do so?
Market players believe the answer to the first part of the question is a resounding yes, while the other will depend on how rapidly details on the HSR route and potential stops will be finalised.
Following this, there will likely be a rush to snap up land in places previously ignored by developers, and the enthusiasm would not be misguided – there are historical precedent to justify it.
The London-Paris HSR and the Tokyo-Osaka HSR were catalysts for both economic and population growth, not just within these cities, but for smaller towns impacted by the selected rail route. And where there is population growth, there is development opportunity.
According to transport researcher, Professor Lee Der Horng at the National University of Singapore, the 10-year deadline set by both countries for the completion of the 350km line is very achievable. In fact, it is the decision-making process that will take up the bulk of the time.
The construction process itself could just take three years, but there could be a one- or two-year period for testing, he told the Straits Times in Singapore.
He explained that construction would be relatively quick compared with Japan or Taiwan, where lines had to be engineered to withstand natural disasters like earthquakes or typhoons.
“So, in terms of engineering complexity, this HSR will be relatively simple,” the professor said.
According to MyHSR Corporation, an entity under the finance ministry responsible for the development and promotion of the HSR, the project will more than double the transit between Singapore and Malaysia. This is significant because existing cross-border interaction is already positively impacting the tourism, retail and property sectors.
Furthermore, it said the other success of HSR projects suggests that the easy commute will serve to further integrate the KL and Singapore economies, which benefits all business sectors. In particular, the HSR is bookended by Jurong East in Singapore and Bandar Malaysia, areas that have been earmarked by both the governments as the second Central Business District for their respective countries.
Though not yet set in stone, it has been reported that the preferred route proposed by the Malaysian government will connect six cities along the coastal route in Malaysia to Singapore. The stations that have currently been identified are the terminus station each in KL (at Bandar Malaysia), Putrajaya, Seremban, Ayer Keroh, Muar, Batu Pahat, Iskandar Puteri and the final stop in Singapore.
About 335km of the HSR line will be in Malaysia, with the remaining 15km in Singapore. The line will be linked across the Johor Strait by a 25m-high bridge near the Second Link.
“The socio-economic benefits of this project are that it will enhance Greater Klang Valley as a location of choice for businesses, while facilitating the seamless flow of individuals and businesses between the two countries. Leveraging on the HSR line, socio-economic development will also be enhanced along the HSR corridor,” MyHSR said in its overview of the project.
“The economic and social benefits
derived from the agglomeration of two metropolises bring about a huge development potential. The geographical concentration of clusters of businesses and employees will result in an enlarged pool of specialist skills, labour and talent. The HSR project is expected to generate 30,000 job opportunities throughout the implementation phase.”
Chief executive officer of MyHSR Corp Mohd Nur Ismal Mahamed Kamal said an estimated 67,000 additional jobs will be created in the first 10 years of HSR operations (2026-2036) from the agglomeration of the many high-value economies and synergies along the corridor.
He said this will provide an impetus to accelerate plans in sectors such as digital economy, bioeconomy, tourism, healthcare, and several others that are potential key drivers along the corridor.
“The enhanced connectivity will enable businesses to be more productive and access a broader market. We have identified over 80 catalytic projects from our initial studies to develop economic growth areas along the corridor with the HSR presence expected to directly impact and stimulate the development of new industries, while strengthening existing local businesses,” said Mohd Nur.
Despite the potential gains, economists also warn that there are downsides for particular industries. For example, bus services and low cost carriers will likely bear the brunt of this new transport solution.
The HSR is expected to travel at 300km/h, resulting in a 90-minute ride from end to end, and international commuters will have to clear customs only once, at the point of departure. That makes it much faster than the regular four-hour roadtrip and quicker than air travel if you count check-in time.
Furthemore, Mohd Nur said back in 2015 that ticket prices would be “less than RM200”.