Race for S'pore-KL rail deal to heat up
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By Kim Jae-kyoung
SINGAPORE ― The race for the multibillion dollar Malaysia-Singapore high-speed railway project is likely to heat up as the two Southeast Asian countries signed a legally binding contract, Tuesday, to develop the 350km rail link.
The formal accord, which came months after a memorandum of understanding was first signed in July, has paved the way for the two countries to shift the project from the planning phase to implementation.
The signing formalizes technical, safety and security requirements as well as regulatory and commercial frameworks. Of the entire rail system, 15km will lie in Singapore and 335km in Malaysia.
Under the contract, both countries will choose a joint development partner in early 2017, which will provide advice on operational, technical and procurement matters.
An international tender will open in the fourth quarter of 2017 for a privately financed assets company to design, build, finance and maintain the rolling stock and rail assets, such as the track work, power, signaling and telecommunications systems.
The two neighboring countries are expected to decide who to award the rail system to by the end of 2018. The construction of the express service between the city state and Kuala Lumpur is scheduled to be completed by the end of 2026.
Although it is too early to say but the international bidding is likely to be a three-way race among South Korea, Japan and China as they look set for straight fight for the rail link with a design speed of 350km per hour that will cut travel time to 90 minutes.
In an interview with a local media outlet a month ago, Singapore Prime Minister Lee Hsien Loong said that the three countries have been lobbying hard for the railway project.
Speaking at a press conference Tuesday, he indicated that a consortium among the three countries, which all have their own railway systems, will be a good idea.
"I know there is a lot of interest from many contractors to participate in this project. I expect very competitive bids and we will choose the best one,” he said.
"And if they get together, that's for the good but I have not seen it happen very frequently that the Chinese, Koreans and Japanese get together to bid for a project."
South Korea seems to still have a fair chance to win the lead role as speculation that China is ahead has been dismissed.
In a media briefing after the formal signing, Mohamad Azharuddin Mat Sah, the chief executive of Malaysia's Land Public Transport Commission, indicated that no country is in the lead.
"Together with Singapore, we're looking at various parameters, not just costing but also reliability, sustainability, safety and value," he said.
It has been widely speculated among industry players that China is leading the race because it is most competitive in prices.
Korea remains confident
On its side, Korea remains confident that it can win the construction project estimated at around $15 billion.
The Korean government said that Korea’s high-speed railway system has a lot of strengths over its rival countries. It claims that China has yet to catch up with Korea in safety and efficiency, while Japan has a limitation in technology transfer because they are private companies.
To pitch its strengths, Korea’s Ministry of Land, Infrastructure and Transport plans to host a series of workshops and symposiums for top-ranking officials from governments of Singapore and Malaysia.
“We will invite Singapore’s transport minister and ranking officials to a seminar on Korea’s railway systems to be held in Seoul in December,” an official from Korea’s transport ministry said.
“Also, the schedule has yet to be fixed but our minister and vice minister will visit Singapore and Malaysia early next year to promote our strengths over China and Japan,” he added.
However, he ruled out the possibility of forming a consortium among the three countries, saying, “Such a consortium is not in our options.”