Actually this was already rumoured or reported earlier but today, in Singapore’s Business Times, it was reported again. Instead of the planned 2020, it will now be delayed by 2 years to 2022. Again, it cited ‘unnamed sources’ for its reports. The reason for this is because there are way too many unresolved issues for it to be fast-tracked. It also said that the engineering, procurement and construction (EPC) contract for the project may be awarded on a negotiated basis though this has yet to be confirmed. This high speed rail (HSR) was supposed to shorten the travelling time from up to eight hours to 90 minutes.
It was also just reported recently that MyHSR Corp Sdn Bhd which is tasked with the project has just been approved by the cabinet. This also explains another reason for the delay. How fast can a newly approved company start its work. Construction is expected to start in 2016. There are seven stations identified thus far. They are Kuala Lumpur, Putrajaya, Seremban, Ayer Keroh, Muar, Batu Pahat and Nusajaya. Of course before everyone starts buying because of this reason, please wait for the signing of the track between both countries. Nothing is certain and anything can still happen. Do note all the recent online news for what I meant.
Actually two years is not considered a long delay for such a project. With its scale and the fact that this is the first time for two countries to agree on all the terms so that both can benefit as much as possible, I think this is worth the time. Let’s not assume that everything is fine just because both Prime Ministers seem to have a cordial working relationship currently. When it comes to national interests, I think both would still have to be firm. Overall cost is also huge and I think for Malaysia, one major concern would be to control its budget deficit. If the budget deficit is prolonged and continuous, do rest assured that the ratings downgrades are really coming. One, Fitch Ratings has already informed that it is putting Malaysia under its negative watch and the potential for downgrade is 50% or higher.
On a personal note, please do not buy Iskandar simply because of this HSR. If the sole reason is only due to HSR, then you should be ready to be very accurate and quick to take action because as soon as everyone starts buying for the same reason, you better be ready to sell. HSR should at best be one major reason for buying. All other developments both commercial as well as infrastructure should be as major if not more major than this HSR. Be reminded that if none of these supportive industries are happening, whether there is HSR or not, it is very risky to buy. Happy reading or buying.
written on 27 Apr 2015
Next suggested article: Scrap VEP. It will boost both Singapore and Malaysia.
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