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High-Speed Rail cancellation: versus flight tickets and experts’ views

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The topic of High-Speed Rail KL – SG was a hotly shared one yesterday and today. Long time back, there were predictions that this HSR may kill the airlines. Well, the KL – SG route is the busiest in the world actually, so perhaps HSR will affect it. Today however there was one Facebook post which detailed how the HSR would fail because no one would be able to afford the ticket anyway. According to some earlier reports, the round trip ticket is likely to be priced below RM400. If we buy tickets earlier, say 1-2 weeks before the flight, the HSR ticket is indeed higher than low cost airlines but may be almost similar or cheaper than MAS or Singapore Airlines depending on when we buy the ticket. I do not think we need to book HSR tickets one month in advance to get special price like flights. By the way, if we look at buying a flight ticket in order to fly the next day, the prices immediately jumped above that of HSR. Hope everyone gets my meaning. The price is definitely not the main issue here yeah. It should be whether it’s beneficial or not. For this, perhaps best to wait for more details, especially from the TEP team.

However, if we are looking at how it will affect the property market, it seems that it would not affect it much as per some industry experts. In an article in Edgeprop.my a few experts were asked for their opinions and these were their comments. Savills Malaysia executive chairman Datuk Christopher Boyd said, “I think some of the hype along the HSR [bringing added value to locations along the alignment] was misplaced and might has been over-optimistic in any case.” He added, “This is because there are already very good communications between Malaysia and Singapore with the reasonably good rails, air and road communications. Furthermore, studies overseas have shown that in many cases, the benefits that HSR links are able to bring are often overestimated. Stations along the alignment can actually pull value away rather than bring value in.”

According to the Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector Malaysia (PEPS) president Foo Gee Jen, the cancellation would affect corridors of growth such as the Batu Pahat-Muar and Melaka-Seremban corridors and especially the Malaysia Vision Valley in Negeri Sembilan. He added, “However, I believe that despite this big announcement, not many people are buying big tracts of land around the station locations. The investments are more small scale. The losses would be more in terms of time and planning. There was not much speculative buying around where the stations are supposed to come up.”

I think a neutral view came from Socio-Economic Research Centre executive director Lee Heng Guie. He said “It is hoped that the government will weigh on all aspects of costs and benefits, as well as the long-term spin-off from the HSR. Much has been said about the desired spin-off from the HSR amid some questions over the need to build the rail given the existing rail and air transportation. Obviously, the decision lies on whether the government’s balance sheet can assume more contingent liabilities or government guarantees, which is largely to finance infrastructure and strategic projects.”

A different opinion came from KGV International Property Consultants Sdn Bhd executive director Samuel Tan. He prefers fo the project to continue because, “It will bring long-term benefits to Malaysia.” His suggestion is to stagger the HSR construction. Key stations such as Bandar Malaysia, Putrajaya, Melaka and Iskandar Puteri  are developed first.

Professor of economics at Sunway University Business School Dr Yeah Kim Leng said that the investor confidence will be affected but the country can revisit the project when we are more financially sound. He said, “It is prudent to call off the HSR and other mega projects that can be revived when the government is in a stronger financial position.” He concluded by saying, “I believe that the longer it is delayed, the more attractive it will be.”  Full article in Edgeprop.my here for reference. 

What are your thoughts from all these experts views? Generally they are not against the High-Speed Rail. However many would have their views as to how the HSR could be carried out and if we noted, I think it is only a matter of time. Perhaps it is true that we may not need it so soon but the current schedule is for HSR to be ready in 2026. Does this mean we only need this much later, perhaps beyond 2030? Let’s be savvy to the fact that for HSR, it’s never a profit and loss kind of accounting or town planning kind of calculation. If it’s based on just the usual profit and loss, then there are many mega projects today that should not have been built many years ago. I think the next article would be on Singapore’s formal response on this matter since it has been confirmed that they have not been informed officially. Happy following.

written on 29 May 2018

Next suggested article: When three becomes one – Thailand – KL – SG

3 thoughts on “High-Speed Rail cancellation: versus flight tickets and experts’ views”

  1. I don’t know why we need so many opinions and debates from all these gurus here for this topic. Common sense, we don’t need a rocket scientist to tell us that the main reason why this HSR project cancelled was due to the overprice cost. Same as the ECRL.

    Like invest in a property, there are so many benefit and endless pros reason for buying in a hotspot area. But does it really benefit if that property is double or triple of the price we’d to pay.

    So what we do ? …. easy ! just cancel and don’t buy the property.


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