Is the KUL-SIN HSR Down to a Two Horse Race?

The race to clinch the Kuala Lumpur to Singapore high-speed rail now looks like it is down to a two-horse race between Asian giants China and Japan with their explicit expression in making their bids.

The Chinese consortium led by China Railway Corp and the Japanese through the world-renowned high-speed railway system, the Shinkansen.

The Chinese consortium – consisting eight companies, including CRRC, China Railway Construction Corporation, China Railway Signal and Communication, and Export-Import Bank of China – covers the design, construction, telecommunication, financing, operating and maintenance sectors for the high-speed rail network.

This marks another step in China’s ambitious strategy to export its HSR technologies in Southeast Asia.

Japan too is making “all-out bid” for the Kuala Lumpur-Singapore HSR contract by offering a comprehensive financial package and other offerings that look rather attractive.

Going by publicly available information, shows that a cursory examination of the proposals from both parties look good, assured that both have experience running HSR in their respective countries.

In awarding the contracts to whichever party would weigh the greatest spill-over effects to trickle down to the overall economy.

While the HSR is set to improve the connectivity between Kuala Lumpur and Singapore, improve travel time between two countries and boost productivity, it would also be important that it meets wider national objectives.

Notable among them is reducing our national debt, raising technological awareness, helping us move out of the middle-income trap and spurring the growth of small and medium scale industries (SME”S).

Malaysia has to ensure that foreign direct investment must bolster its capabilities, particularly human capital and ensure transfer technology takes place at a faster pace.

Going by media reports alone, the Japanese appear to have packaged an attractive deal that would meet many of the national objectives such as full-fledged training for its officials, operators, and engineers, and a comprehensive financial package that would help the financial burden for both nations. In addition, it is also helping spur SMEs through its local vendor development programmes

Japan is offering technology that Malaysia needs to get out of the middle-income trap and financial package that would help us reduce its financial burden at a time when our national debt is soaring.

With the financial assistance of the likes of the Japanese, Malaysia would be able to carry out many other infrastructural projects without any due strain on its national debt.

This is important because as national debt increases the threshold 80%, the government would have less money to spend on education, health, and other essential services.

The Japanese holistic financial package would ensure that we are able to continue carrying out infrastructural projects considering the relatively young age of the country and its population.

In a surprise turn, Japan has announced its intention to collaborate with local universities as partners to set up an HSR training centre in Malaysia for skilled manpower to run what will be Southeast Asia’s largest infrastructure project.

Three universities have been identified for the purpose. They are Universiti Teknologi Malaysia, Universiti Tun Hussein Onn both in Johor and Universiti Teknikal Malaysia in Melaka.

Malaysia appears to have cracked the code in its long quest to raise its technological prowess and escape the middle-income trap through industry-academia collaboration with this new arrangement between the Japanese and the local universities.

It has long harboured greater industry-academia collaboration with a hope that academia would assist industry by carrying out industry-driven research. The Japanese model with the local universities should be used as the template when Malaysia decides to collaborate with other foreign investors to expedite its drive to an high-income nation.

The technologies generated in these universities could be adaptable to other industries, not just high-speed rail and will push up the entire technology competence of Malaysia.

The 350-kilometer HSR is intended to cut travel time between Kuala Lumpur and Singapore to 90 minutes and stimulate the economy of several localities along the route, and it is projected to start operations around 2026.

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