A new start for old neighbours (Malaysia-Singapore)

December 21, 2016

Sharing the cost of building HSR


Image result for Kadir Mohamed-- Fifty Years Malaysia-Singapore Relations

I READ with great interest “HSR helps move things on right track” by Mohd Nur Ismal Mohamed Kamal, Chief Executive Officer of MyHSR Corporation (The Star, Dec 19), his response to the commentary “A new start for old neighbours” by Mergawati Zulfakar (The Star, Dec 16).

It is very uplifting indeed to hear about all the potential spin-off benefits of the High Speed Rail (HSR) project to be undertaken by Malaysia and Singapore.

In the first place, however, the people of Malaysia are equally keen to know the cost of implementation of the project. More precisely, people want to know which side pays for what.

The reply by the CEO of MyHSR sounds very much like laying out the arguments that since Malaysia will make all the gains that he has described, Malaysia must be ready to pay for the bulk of the cost of implementation.

I certainly hope this is not what he implied. I feel that in this matter the question of which side shall make how much profit out of the HSR project must also be taken into account in determining the formula for sharing the cost of implementation.


Author, Malaysia-Singapore: Fifty Years of Contentions, 1965-2015

A new start for old neighbours

by Mergawati Zulfakar@www.thestar.com.my

Durian diplomacy: Najib checking out the Musang King durian on display during the Malaysia Agrobazaar in Singapore in 2014 as Lee and his wife Ho Ching look on. —Bernama

Durian diplomacy: Najib checking out the Musang King durian on display during the Malaysia Agrobazaar in Singapore in 2014 as Lee and his wife Ho Ching look on. —Bernama

IT would be hard to ignore the fact that bi­­lateral ties between Malaysia and Singapore were thorny for decades.

For many years, there was mistrust among officials, ministers and leaders, especially when they tried to resolve outstanding issues including the KTM Bhd land in Singapore, sale of water from Johor and a new bridge to replace the Causeway.

The animosity was evident, so much so that during the signing of a special agreement to refer a disputed island (Batu Puteh/Pedra Branca) to an international court 13 years ago, the foreign ministers of Malaysia and Singapore got into a verbal sparring match as they tried to explain each country’s stand on exercising their rights over the rocky island.

Sure, they cracked jokes with each other during the lunch that followed, but for many who witnessed the sparring during an event that was broadcast live on RTM, it was evident relations were not well. It was undiplomatic and ugly.

  It was a roller-coaster ride for bilateral relations and an unpleasant one between countries deeply divided on issues.

Fast forward to 2016. It is ironic that today, the love for a thorny fruit has, in a way, brought ties onto a stronger and firmer footing. Durian diplomacy seems to work the magic to put ties back on track.

Singapore Prime Minister Lee Hsien Loong’s “obsession” for durian is well known and during one working trip to Malaysia, one of the first things he asked about on arrival was the Musang King durian.

When he became Prime Minister in 2009, Dato’ Seri Najib Tun Razak made it clear he wanted a bilateral relationship that is bold, imaginative and courageous.

“If we take the attitude that as members of a new generation, that both Prime Minister Lee and I are young, we’re not part of that generation, we should not be encumbered with the baggage of history,” Najib had said.

The two leaders struck a personal close relationship over the years and this has made things a lot easier to manage. On Tuesday, as the two leaders attended the seventh leaders’ retreat, history was made again by the signing of the bilateral agreement to construct the high-speed rail line between Jurong East and Bandar Malaysia.

Much has been said about the project, which was only brought to the table in 2013.

Image result for malaysia singapore high speed rail

The “marquee project” will bring the two countries closer together, improve connecti­vity, deepen people-to-people ties and catalyse further economic cooperation.

The vibes are definitely good between the leaders and it has a spiral effect on the ministers and officials, too.

Yes, gone are the days of confrontations, the language used is different and the talk now is more on cooperation. Putrajaya’s less confrontational approach in dealing with Singapore is bearing fruit.

Yet, we need to be reminded that while several issues have been resolved, including the Points of Agreement on KTM land in Singapore, resulting in joint venture projects between Khazanah Nasional and Temasek Holdings in Singapore and Iskandar, there are still many issues on the table.

In any negotiations, despite the good vibes that are flowing across the Causeway, Malay­sia should never take Singapore for granted.

A Malaysian official was rather blunt when he said that Singapore still plays hardball when it matters.“Their DNA hasn’t changed. What they stand for hasn’t changed. What you see is never what you get,” the official added.

Over the years, Malaysian officials who have had dealings with Singapore agree on this – their counterparts will ask, “What will Singapore get?”.

“Charity is not in their vocabulary, forget about the spirit of neighbourliness,” said an official.

Back to the HSR project that is targeted to start service in 10 years: we know it will cut travel time to 90 minutes, we know it is supposed to spin economic activities along the stations and we know the project, the first of its kind in the region, is being followed closely by other countries wanting a piece of the multi-billion project.

The two leaders keep saying the HSR is a game changer but what we want to know is, exactly how are citizens going to benefit?

Firstly, the fare, already speculated to be hundreds of ringgit between Bandar Malaysia and Singapore, is an amount that only business people may be willing to pay. It may be too steep for ordinary citizens.

The service will benefit a certain population and group of people, but what about the larger population? Are there any real conversations on efforts to create jobs in the smaller towns that the train passes by?

Will the agency tasked to create economic activities have a conversation with Singapore on what sort of businesses can be set up so that the Government can spur economic growth along the corridor?

Is Singapore willing to relocate factories so that people do not have to travel all the way there for work? After all, it will help relieve congestion at the border crossings, something Singapore has always wanted.

While the Land Public Transport Commis­sion and MyHSR are dealing with their Singa­pore counterparts on the HSR, there must be parallel negotiations on the economic impact to the people living along the rail line.

“If you are not going to ask from them, Singapore will not volunteer and negotiate what Malaysia wants,” said an official. “Singapore is a small country and they know they can only go so far,” he said.

“So what do you do? They actually need us, their neighbours and we are the most immediate.They have a glossy veneer and if you don’t cut through, you don’t see the ‘naughtiness’. They look polite and professional but yet they are waiting to ‘kill you’ off.”

But is Malaysia ruthless enough and willing to take advantage of the situation? Maybe Malaysians do not have that kind of DNA but we must bear in mind that when others sense you are weak, they will go for the kill.

At the end of the day, Malaysia-Singapore ties must be really a win-win situation and not just to make one country flourish. Isn’t it better to survive together, especially in this challenging and changing global environment?

12 thoughts on “A new start for old neighbours (Malaysia-Singapore)

  1. The trade-off negotiation for Malaysia should be based on its main objective to link KL to JB to the south and eventually north to Penang with HSR.

    Initially, extension to Singapore is to supplement the passenger load factor viability in relation to the cost-return beneficial effctivenes for the successful implementation of the project.

    Malaysia should thrive on its own without having the HSR extended to Singapore.
    That should be Malaysia’s short and long term view when negotiate in sharing costs with Singapore .

  2. Quote:- ““Charity is not in their vocabulary, forget about the spirit of neighbourliness,”

    Talking about DNA, many of the Singapore civil servants who work on this and other cross-border projects were actually ex-Malaysians with Malaysian “DNA” who were awarded ASEAN scholarships, (because they couldn’t get any from Malaysia in spite of sterling academic results), and stayed on and became Singapore PRs or citizens.

    Would you be “charitable” to a country that does not appreciate you?

  3. Mergawati is being sentimental about Malaysia-Singapore relations, She fails to realise that Singapore is all business with no sentiments. Their negotiators will want to get the best deal. That means we must rule out the possibility of 50:50 deal.

    It will depend on a) who is desperate to want this project and b) who will benefit the most from it. I think, Najib is desperate. He needs mammoth projects like this one and the North Borneo Highway project to sustain economic growth and create jobs.

    My view is that Singapore is likely to bear not more than 20 percent of the project cost, that is pay the cost of building that portion from Johor Baru to Woodlands and the cost of the expansion of the railway terminal. Singapore banks will provide the funds to build that portion. What do you guys think? –Din Merican

  4. What a self-deprecating write-up this is. Too often Malaysian commentators shift the blame on Singapore whenever agreed deals end up working all too well for the Republic but does not do so in likewise manner for Malaysia. It looks like becoming
    almost a pattern.

    Malaysia is too big for Singapore. It has huge land mass, big population and abundant natural resources. Singapore has none of these. Why can’t Malaysia upend Singapore at least once in a while in negotiating such deals? Does dominance of one race at the administrative service and other branches of the government have anything to do with them under achieving? There are indeed some individuals among them who may be top performers but a country needs a critical mass of such people to keep the country moving upwards. One can just pick a Singapore Minister or Admin Officer at random and question them on various issues confronting the Republic and one will be spell-bound at the clarity of their thoughts, depth of knowledge and in articulating their considered views in earnest with confidence.

    The setting up or relocating of factories in industrialised countries is largely the prerogative of investors and industrialists and not governments. Many factors like availability of skill workers, industrial peace, good connectivity to export products to outside markets etc have a bearing on investment decisions.

  5. Singapore has no need of HS-rail, unless it reaches Beijing.

    Singapore and Beijing is having some fun these days. So, I see 1PM being more eager than Singapore for the completion of this HS-rail, and more willing to pay up for a bigger share than Singapore in the short-run.

    Nonetheless, there would come a time Singapore would indeed need this HS rail built, just like how some Hong Kong residents felt left out.

  6. HSR provides Singapore with some tourist, better transport businessmen. For what they gain, it’s not a big catalyst for them directly. To them, the biggest potential is if HSR ignite growth in Malaysia, it will benefit them in them services and capital they provide.

    Hence, there is no reason for them to risk a non profitable venture. This will be easily a RM100b cost risky ventures, not chicken feed to anyone. Even if China were to do it, they would insist on getting their money back in land, guarantees.

    If they were forced to take a stake, yes no more than 20%, any financial guarantees not from them. Would not be surprise if the 20% is a convertible. I would try.

  7. “My view is that Singapore is likely to bear not more than 20 percent of the project cost….”

    C’mon, Din, it’s kind of obvious, isn’t it? Of the entire rail system, 15km will lie in Singapore and 335km in Malaysia.

    I’m more interested in who will win the construction project estimated at around $15 billion — the Chinese, Korean or the Japanese. The wannabe white Lee Hsien Loong really hates the Chinese and Najib owes the Chinese a favor.

    It has been widely speculated among industry players that China is leading the race because it is most competitive in prices. But Singapore insisted looking at various parameters, “not just costing but also reliability, sustainability, safety and value” — insinuating that the Chinese high-speed rail is not reliable and not safe. Japan has a limitation in technology transfer because they are private companies. And Korea has ruled out the possibility of forming a consortium among the three countries.

    Honestly, I do not know what the Singaporean are saying. I’ve taken high-speed rail in both China and Japan many times and it is my opinion that the Chinese train is much better than the Japanese one. Din, do you remember in the 1960’s till the 70’s when all Japanese products were considered cheap and inferior, even the toys for children? When we said “made in Japan” meaning bad? China has the same image today.

  8. Taiwan HSR is running at loss every year since it’s running alone. If the two Asean country can start the ball rolling who knows Thai & Vietnam and eventually Kunnming and beyond will be the real game changer. We have to start somewhere. I hope to have lunch at Pasar Seni and back for dinner at Beach Road. .hopefully in 2026.

  9. Din says Singapore is not likely to bear anything more than 20% of the cost of implementing the HSR project between Kuala Lumpur and Singapore. Singapore is equally unlikely to agree to having anything less than 50% of the profits to be derived from the joint service between the two countries. Now, would that not be ironic indeed !

    Yes. That’s what I like about Singapore. It is a rates of return driven nation when it comes to doing business. Get the best deal possible now because Najib needs the project more than they do. –Din Merican

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