HSR decision still pending as existing projects are a ‘priority’: Malaysia’s Minister

KUALA LUMPUR – Malaysia’s Cabinet has yet to discuss reviving the Kuala Lumpur-Singapore High-Speed Rail (HSR) project, as the government focuses on completing existing transport links that will support economic development and sustained growth, said Finance Minister II Amir Hamzah Azizan.

“HSR is something that we will always consider, and a study has been conducted. However, at the moment, the Cabinet has not discussed it to that level. We are waiting for the Cabinet’s decision,” Datuk Seri Amir told The Straits Times in an interview ahead of the 11th Malaysia-Singapore Leaders’ Retreat scheduled for the end of 2024.

On July 20, Malaysia’s Transport Minister Anthony Loke said that negotiations with Singapore on the HSR project could only be initiated after the Cabinet makes a policy decision on the feasibility of the RM100 billion (S$30 billion) project by the end of the fourth quarter.

But six weeks to the year end and Prime Minister Anwar Ibrahim’s administration has yet to discuss the matter at the highest level.

The HSR project was terminated in 2021 after both countries failed to agree on changes proposed by Malaysia.

Datuk Seri Anwar’s administration, which took office in November 2022, has expressed openness to reviving the 350 km project, provided it is fully funded by the private sector without involving government funds or guarantees.

In July 2024, Singapore transport minister Mr Chee Hong Tat told Parliament that the Republic has not received any new proposal from Malaysia for a high-speed rail line between the city state and Kuala Lumpur, but is willing to discuss it “in good faith, starting from a clean slate”.

Mr Amir told ST on Nov 19 that Malaysia’s current focus is on completing and further developing its existing transport links, such as the Gemas-Johor Bahru electrified double-track rail project (Gemas-JB EDTP) and the East Coast Rail Link (ECRL).

“The priority must be on what we have today… The focus should be on realising the value from Gemas-JB EDTP and ECRL. This is where the government’s attention should be,” he stressed.

Scheduled for completion in April 2025, the RM9.5 billion Gemas-JB EDTP will reduce travel time from Johor Bahru to Kuala Lumpur to 4½ hours, from around seven hours currently by diesel train, KTM told ST.

Meanwhile, construction of nearly three-quarters of the ECRL project has been completed as of October 2024. The first phase of the ECRL, which will connect Gombak, Selangor, to Kota Bahru, Kelantan, will shorten passengers’ journey from Kota Bahru, Kelantan to Gombak, Selangor from 7 hours by road to 4 hours by train.

Conceived under Beijing’s Belt and Road Initiative, the RM50 billion ECRL spanning 665km will link Peninsular Malaysia’s east and west coasts by the end of 2026. It is also projected to reduce shipping times from China via Malaysia to Europe by 30 hours.

In his June 2024 visit to Kuala Lumpur, China premier Li Qiang said the ECRL could be the last piece connecting Malaysia to the pan-Asian railway through to Kunming, capital of China’s Yunnan province.

Apart from focusing on the completion of its ongoing transport links, the government wants to prioritise the less grandiose projects such as public transport, and getting people from point to point in their daily commutes.

Some RM750 million has been allocated for the public transport sector under Malaysia’s Budget 2025.This includes the procurement of a fleet of 895 electric buses for feeder services in the greater Kuala Lumpur capital city area.

“The priority of the Transport Ministry (in Budget 2025) is to make public transport more efficient… The more reliable the first-mile and last-mile services are, the more likely the public will use them,” Mr Amir said.

The Ministry of Economy estimates that bus and rail services cover only 55 per cent of the Klang Valley area, where private vehicles are the main mode of transportation.

As the government plans to phase out the RON95 petrol subsidy by mid-2025 to save RM8 billion annually, improving public transport connectivity will encourage more people to use buses and trains, and ease the pain of higher petrol prices.

In addition, the implementation of progressive wages, including higher wages for the private and public sector, is a priority reform for the country’s continued economic growth, Mr. Amir said.

Malaysia aims to increase its compensation of employees to GDP ratio from 33.1 percent in 2023 to 45 percent by 2033, in line with the standards of advanced economies in the Organisation for Economic Co-operation and Development (OECD). This will help reduce inequality and ensure a decent quality of life for its citizens.

All these initiatives form part of Mr Amir’s plan to fire up the economy by activating what he calls the “twin engines” for economic growth, namely domestic direct investment (DDI) and foreign direct investment (FDI).

“Government-linked investment companies are stepping up to invest in Malaysia by effectively (putting in) RM150 billion over the next five years... FDI has been very strong. We had RM330 billion last year, and we attracted RM160 billion in the first six months in 2024 or 18% higher than the same period a year ago,” added Mr Amir.

He expects these initiatives to deliver better results than mega projects.

“These (economic and fiscal reforms) will boost private consumption, which drives the economy forward. Do we need mega projects to power up the economy? If the reforms work well, it will generate much more sustainable growth over time,” he added.