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Friday, December 16, 2016

HSR and ECRL: Where is the focus?

Singapore PM is right about need to focus on one massive project and to do it professionally before embarking on another, especially when resources are limited.
COMMENT
kereta-api-laju
By Saleh Mohammed
Malaysians and Singaporeans are apparently thrilled by the High Speed Rail (HSR) project, to go by reports in the mainstream press.
The latest update is that work will commence next year and is targeted for completion in 2026.
It is worth noting that the government spent a long time in research and analysis to determine the benefits and risks of the project to the country.
Its execution, which includes design, tendering and evaluating the proposals, will be very important. The financing structure too needs to be robust. It has to be clearly specified and transparent at all levels.
Tender documents will be issued at the end of 2017 and bidders will be given a year to submit their proposals. The evaluation will be at the end of 2018.
According to the information given so far, the trains are designed to reach the maximum speed of 320km per hour. The track will stretch across 350km and there will be six transit stations. The trains are expected to be 10 coaches long with a capacity of 100 passengers per coach.
Early projections, as reported in The Star in February 2013, put the cost of the project between RM20 billion and RM30 billion, inclusive of land acquisition.
In 2006, a public-listed company made a proposal, with a projected speed of 250km per hour and a travel time of 99 minutes. The Malaysian government halted the project in 2008, saying the cost – RM8 billion – was too high.
However, the latest estimate by Malaysian authorities puts the cost between RM60 billion and RM65 billion. The Singapore government has not publicly made any estimate.
At the end of the day, the project is about more than economics; it is also about good relations between the two countries.
Now, let us look at the East Coast Rail Line (ECRL). Last March, the Land Transport Commission invited Requests for Information (RFI), setting the closing date at the end of May.
The Engineering, Procurement, Construction and Commissioning Agreement (EPCC) for the RM55 billion project was signed in early November 2016 with completion due by 2022. The original plan was only to upgrade the railway system and to connect with railway lines currently operated by Keretapi Tanah Melayu Berhad.
Less than three years ago, ECRL was estimated to cost around RM30 billion but the transport minister recently claimed that it would cost RM55 billion, being the value of the Financing Framework Agreement. However, China’s foreign ministry is “unclear on the specifics of the situation”.
This article is not meant to drown the fanfare and full support by the 46 Chinese guilds and associations in Malaysia that have signed the Belt and Road Declaration for the ambitious strategy from China. It is just to compare the amount of work done on the two massive projects.
It will take about a year to issue tender documents for HSR and another year for bidders to submit tenders.
With ECRL, however, everyone has been super efficient, with the signing of of the EPCC Agreement taking place within eight months of the Request for Information (RFI). But RFI is not a Request for Proposal (RFP) or tender.
Time and effort is expended in researching and analysing the HSR to understand the impact, benefits, risks and to ensure fairness and transparency in the financing structure. Hence, one can only conclude that it is being carried out with the highest degree of professionalism.
It’s interesting to observe the contrast between the Malaysians’ gung-ho attititude and Singapore prime minister Lee Hsien Loong’s sobriety. When asked about a third bridge to link the island state, Lee said: “I would focus all my energy doing that one (HSR) before we launch a new big project.”
Any reasonable person would agree that one should focus on a massive project and do it professionally before embarking on another, especially when resources are limited.
Saleh Mohammed is an FMT reader.

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