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Spending more money with connectivity

Posted in China and Hong Kong Property related, and HSR MRT n other Ts

I love connectivity. With the PLUS highway, a trip to Penang from Sungai Buloh exit (330km trip) takes just 3 hours and 30 minutes or less. Seriouslah, at 110km per hour. (yes, yes, I have done much faster with a close friend) Last Friday I picked up my kids at 2pm, faced some jams when I was nearing Penang and could still arrive well in time for dinner in Penang. I spoke the next day in Penang Property Convention 2018 and I left Penang at 1030am on Sunday so that I could be in time for my talk in KL for StarProperty. on a Sunday. If I did not travel with my family and just flew in, I would have spent much lesser as it’s just me and I do not even need accommodation. Fly in and Fly back. With PLUS, I spent more money since I could travel with my family. So, I am all for the High Speed Rail KL – SG. Read my views here.

Image source: https://qz.com/1396701/everything-you-need-to-know-about-taking-hong-kongs-new-high-speed-rail-to-china/

Since ours (HSR) is delayed to many years later, perhaps we look at some potential effects from China and Hong Kong’s latest High Speed Rail connectivity. Article in Bangkokpost.com here. It says that during the China’s National Day holiday on Monday, more than 60,000 are expected to get to the city (Hong Kong) from China. It says that shopping is not a priority since Yuan depreciated this year by 8.8 percent. One Chinese university student Trumy Guo, said that the ride was “super comfortable”, but the ticket price could have been cheaper. A second-class seat from Guangzhou South to Hong Kong cost HK$247 (RM130) for the journey of an hour.  She was going to Hong Kong with friends and they will ‘eat and play.’  Her friend meanwhile says that she will buy cosmetic and skin care products, as well as clothes, in the city. Another passenger said that she will only spend around 2,000 yuan in Hong Kong for the two days she’s staying. Gilly Zhong Shao-ling, a Shenzhen resident plans to spend HK$2,000 to HK$3,000 in the city on goods such as clothes and baby milk formula. Within the first 8 months of 2018, 33 million Chinese visitors visited Hong Kong. This is up 13.8% from the same period last year. That article in full for reference here. 

60,000 per day HK$2000 is HK$120 million. That’s per day by the way. It’s only starting and many may not yet experience this convenience yet. As for ticket prices, well 60,000 per day x HK247 is HK$14.8 million. On a yearly basis, this is HK5.4 billion. Total cost to build is US$11 billion. Nowhere does it mention when will the margin from the ticket prices will ever cover the cost of construction. Assuming only 10,000 people travel into KL on average per day and spends just RM500 per trip for accommodation, food etc, that’s RM5 million per day. With a multiplier effect of 4, that’s RM20 million into the pockets of people and businesses per day. (Haha… Yes, I am talking about the people who keep saying that ticket prices from our HSR will never be able to cover the cost of construction of the HSR) High Speed Rail gives benefit to the economy. It’s not for the government to earn profits from its operations. Happy understanding yeah.

written on 6 Oct 2018

Next suggested article: SG’s side have no loss of jobs even with HSR’spostponement

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