Singapore Business Times: The business case for getting Asia-Pacific’s rail network on track
Singapore Business Times Commentary
By Ivan Kladnig
HYPERLOOP, autonomous vehicles and ultra long-haul flights are heralded as the future of travel, but rail is quietly undergoing something of a renaissance in Asia-Pacific too.
Rail is now the region’s third-largest travel segment and was the fastest growing online travel segment in 2017 (up 23 per cent year-on-year).
Population growth and rapid urbanisation in Asia-Pacific have created urgent demand for transformation and expansion of existing rail infrastructure, and there is also a strong economic and business case for developing better train links across the region.
It’s great to see Asia-Pacific governments recognising the potential, with a number of big-budget investments in rail infrastructure planned over the next 20 years – including the Kunming-Singapore railway to connect China, Singapore and all mainland South-east Asian countries, as well as the proposed Singapore-Kuala Lumpur high-speed rail link.
However, given that the approval for the Kunming-Singapore railway hasn’t yet been issued on all the routes, or even begun on some lines, it’s looking unlikely that it will be completed in the next 10 years, while the proposed Singapore-Kuala Lumpur link has recently been postponed to at least 2031. These delays mean delayed benefits.
Globally, high-speed rail has dramatically changed the way people travel and even commute, a good example being the London to Paris route. Before the Eurostar was built, the journey between London and Paris used to be one of the busiest air corridors in the world. The high-speed rail now gives travellers the opportunity to travel more frequently, increase the time they spend at a location and change the purpose of visits, making day trips much more feasible.
For Singapore, one of the biggest business benefits of a high-speed link to Kuala Lumpur and other connections across the region would be increased access to talent, which could be a welcome relief for industries currently struggling with local skill shortages.
Pan-regional, high-speed rail connections would also present opportunities for companies to build offices outside a central city but along the high-speed train route, again helping to tackle skill shortages and giving businesses a much wider talent pool to draw from.
NEW TRADE ROUTES
Beyond the major cities, rail connections also give greater access to previously inaccessible locations and, in turn, new revenue streams.
For Singapore’s businesses, this could mean easier access to suppliers, manufacturing, industry and even new customer bases, opening up more geographic flexibility in how and where they do business – something that might be particularly appealing to Singapore’s army of cost-conscious startups.
Tourism is another sector that could see benefits from a better developed regional network, particularly because the reputation of rail travel has changed significantly in recent years.
Historically seen as a cheap form of transportation for those with lower incomes who can’t afford air travel, affluent travellers are increasingly seeing the benefits of time saving, convenience and service, and are actively choosing rail for leisure trips in countries such as Japan that boast reliable and modern networks.
The growing affluence of Asia-Pacific travellers coupled with this shift in perception of high-speed rail as a luxurious way to get from A to B present a big tourism opportunity for Singapore and other Asian countries to leverage, as long as investment is made in service quality and modernisation.
COMPETING ON A GLOBAL LEVEL
To reap all of these benefits, Asia-Pacific needs to develop a network that at least equals the services and ease of travel provided in more mature rail markets such as Europe, as this is the experience both business and leisure travellers will increasingly expect.
Technology is leading innovative changes in this area and will be instrumental in helping Asia-Pacific governments to provide comparable service to Europe in terms of payment options, mobile experience and, most crucially, seamless pan-regional integration. There also needs to be more cross-country collaboration.
Ultimately, the potential benefits of a developed rail network across the region will only be realised if governments and the private sector can work together to make it a collective priority – ideally one that is brought to fruition sooner rather than later.
- The writer is senior manager, Rail, at Amadeus.