Malaysia Should Consider Proven Rail Technologies

By Sakina Mohamed KUALA LUMPUR, Nov 5 (Bernama) -- The construction of the High Speed Rail (HSR) link between Kuala Lumpur, in Malaysia and Singapore is set to kick off in 2016, with a completion date estimated over nine years. Many international operators of HSR lines are lobbying for the project that economists predict may cost some US$11.97 billion (RM40 billion) with immense spillover benefits. However, there are many aspects of the project that have yet to be addressed. The Land Public Transport Commission (SPAD) Chairman, Syed Hamid Albar acknowledged this when explaining the reason why it would bust the initially set 2020 deadline. "There are more elements than just construction that the governments need to study", he was quoted as saying to the media. THE JAPANESE SHINKANSEN One of the high speed rail system to consider is the Japanese Shinkansen (bullet train) technology. The Shinkansen technology has been adopted by Taiwan, which HSR line runs 345km from Taipei-Kaohsiung in about 96 minutes. It is roughly the distance of KL-Singapore and thus the planners and observers could visualise and appreciate the services of the KL-Singapore high speed train in the future and the challenges involved in establishing the rail system. Japan developed the world's first HSR in 1964, and today boasts six lines, zero passenger fatalities or injuries due to train accidents and less than a minute delay. The Taiwan Shinkansen also boasts a similar safety and reliability record with zero passenger fatalities, less than a minute of average delay and nearly 100 per cent availability. JAPAN’S SUPPORT SCHEME Japan has openly lobbied for Malaysia to adopt the Shinkansen system when its Prime Minister Shinzo Abe met with Prime Minister Najib Razak in Tokyo, earlier this year. In a meeting with Malaysian and Singaporean press last month, its Land, Infrastructure, Transport and Tourism Ministry's Railway Bureau director Tomohiro Kobayashi also expressed Japan's willingness to provide funds and expertise into the KL-Singapore HSR project, should the Shinkansen system be adopted. "If the Malaysian government needs assistance in operational cost, we can use the Official Development Assistance (ODA) (a system where concessionary loans are given to help developing countries). Our government can also help by injecting funds in the form of investment in the private corporation involved in the project", Kobayashi told Malaysian and Singaporean reporters during a visit to the ministry here, recently. When asked of the amount of financial assistance that might be provided, Kobayashi said that it was difficult to go into the specifics when the Malaysian government had yet to discuss details on the project. In addition to funding assistance, Japan is also offering training and on-site assistance with operation and maintenance as it did with Taiwan. CONSTRUCTION CHALLENGES Malaysia has identified seven stops for the HSR line namely cities of Kuala Lumpur, Putrajaya, Seremban, Ayer Keroh, Muar, Batu Pahat and Nusajaya. "We have consulted the economic planning unit of the states involved and they have given their feedback. We will make the adjustments accordingly", Syed Hamid told reporters last month. However, in a more recent interview, he mentioned that the government might resort to using as much of its land as possible to avoid property-acquisition disputes with private land owners. There are also engineering challenges to consider. Avoiding villages, private properties, overdeveloped urban areas and land with unstable ground means there is a need for expensive superstructures like long elevated platforms and underground tunnels. These superstructures require detailed planning in which last minute change of suppliers could result in high cost overruns including lawsuits. Tunnel boring, for example, should only be done after decisively selecting the system to adopt. The Japanese Shinkansen require a tunnel diameter that is barely wider that its trains. This is to improve efficiency of operation and reduce noise and vibration. By contrast, the European TGV systems require much larger diameters that meet European safety regulations. It is also worth taking a leaf from the Japanese's "crash avoidance" principle, by building dedicated HSR tracks with no level crossings to avoid collision. These tracks should not be shared with other passenger trains, and especially not with freight trains, which carry higher axle loads, subjecting the track to higher wear and tear. RETURNS ON INVESTMENT As many HSR lines across the world have shown, ticket sales alone may not reflect returns on investment. It is almost guaranteed that there will be an economic spillover and boom in the smaller cities along HSR lines, in addition to an increase of population resulting from rising job prospects. In Japan, the opening of Phase 1 of the Kagoshima-chuo Shinkansen Station in 2004 contributed US$166 million (RM531 million) of revenue to the local economy. The figure soared to US$464 million (RM1.48 billion) after the opening of Phase 2 in 2011. There was also an increase of 1.1 million visitors to the Kagoshima prefecture within the period. The value and number of properties along HSR lines also increase. The ease of connectivity has also led to lesser migration rates from rural areas to larger cities. This not only helps develop rural areas but lessen problems plaguing major cities due to overpopulation such as high property prices, unemployment and urban poverty. SPAD estimates that the HSR will carry up to 49,000 passengers daily by its 10th year of operation, giving rise to an annual ridership of 17.9 million. ----------------------------------------------------------------- SIDEBAR HOW IS MALAYSIA GOING TO FINANCE THIS? As the cost of the high speed train is astronomical, how is the government going to finance this undertaking? Prime Minister Najib Razak in February had said that it was going to be implemented "on a basis of a private-public partnership, in which the private sector will run the project". It is unclear whether this meant a private consortium will manage the project and the government will only step in if things go south, as was the case with the Taiwan High Speed Rail (THSR). Looking back at Taiwan's own experience, it may not be as easy as it seems. Taiwan, which adopted the Japanese Shinkansen (bullet train) technology, started off with its HSR project managed by private company Taiwan High Speed Rail Corporation (THSRC), which also operates the 345km line that runs from Taipei-Kaohsiung. The Taiwanese government decided it would go with a build-operate-transfer franchise. THSRC won the franchise in 1997 due to its cheaper bid and promise of zero public spending. Unfortunately, only a year later it had to go back on its word when the 1998 Asian Crisis hit. Due to problems acquiring needed capital, THSRC took up credit and capital from state companies – quietly, of course. This, on top of high interest bank loans and high depreciation costs. A decade later, while the service was running, it was slapped with the global financial crisis. Malaysia could also learn from the lawsuit faced by THSRC after it allegedly reneged on a promise to buy equipment from the preferred bidders, Eurotrain, and instead awarded the rival Japanese consortium. The decision was widely rumoured to be political. After a costly government bailout in 2009 and an increase in ticket revenue, the US$18 billion (RM59.6 billion) project started to report a positive operating income. It was a perfect financial storm for Taiwan and may be an altogether different story for Malaysia. However, this is something to be expected of a mega-project with long-term financing. Even if the economy is good, private financing will still be more expensive than government borrowing. Meanwhile, Syed Hamid, when met in Japan last month, said that the tender for the project would not be open to "everybody". "It will be open to those from the field, and in this area, the players are very few. It will not (simply be given) to any class-A contractors", he told the media at the HSR conference in conjunction with the 50th anniversary of the Japanese Shinkansen. He however affirmed that local contractors would be involved. "This is because the spin-off from it is a lot, including employment", he said. (photoBERNAMA) --BERNAMA