Moody's cautious on Najib's High Speed Rail link project

SINGAPORE -Despite creating a lot of excitement on both sides of the border, Moody's is taking a cautious view on the High Speed Rail link between Singapore and Kuala Lumpur until more details of the project are revealed.

Christian de Guzman, Vice President-Senior Analyst, Moody's Investors Service Singapore Pte Ltd, said: "It is definitely creating a lot of buzz, but I think we prefer to be cautious about this.

"For one thing, when you look at the high speed rail, we still do not know a lot of details," he told Bernama in a phone interview.

He was responding to the announcement by Prime Ministers of Malaysia Datuk Seri Najib Abdul Razak and his Singaporean counterpart Lee Hsien Loong at the Leaders' Retreat on Feb 19 on the High Speed Rail link between Singapore and Kuala Lumpur.

"We do not know where in Singapore the rail link will be located, which could influence how successful this project could be.

"The exchange of KTM land has already happened between both governments over the past two years. Will there be yet another land exchange if you wanted to restore rail services to the middle of the city of Singapore?" de Guzman said.

He also pointed to the uncertainty posed by the up-coming election in Malaysia, adding no one really knows if there is going to be a change of government later this year in Malaysia.

"From our perspective, it doesn't matter who wins, but policy certainty is important. Even if there was a change in government, if investors are assured that the policies are continued there should not be a problem.

"Nevertheless, we are confident that a lot of things won't change much," he said.

Asked on the impact of the project, he said: "Definitely, there will be a boost to tourism, general linkages, but it also depends on the pricing.

"If the ticket costs as much as a plane ticket to KL, there might not be much of an impact, but at the same time it could facilitate trade and the flow of people.

"Many more Singaporeans can go to Legoland or Malaysians to Orchard Road, for example.

"With high property prices in Singapore, it does mean that people are looking for more affordable ways and cost of living, and improved transportation links could make it easier for Singaporeans to live in Johor.

"I think that is also positive in the sense that tighter relations would facilitate more coordination in terms of policy."

Asked to describe the Leaders' Retreat, de Guzman said: "This is the latest, they (the leaders) have been doing this quite often now and this is the fourth, I think it is an important sign that both sides are prioritising this relationship."

de Guzman said although there is a lot of excitement, the actual economic impact from the project will not be felt until much later.

"It is good to know and good to understand, but what we are waiting for is to get more details," he added.

– Bernama