Singapore - Kuala Lumpur High Speed Rail issue

Purposes for High Speed Rail (HSR) press conference: 

1) To summarize helpful results from scholar paper to present HSR experiences of the countries which have been operating HSR system with long history.

2) To spark the discussion and conversation in the public about HSR system so that the government could gather opinions from the people, businessmen and NGOs before the implementation of the mega project as this is an important issue relevant to all taxpayers.

3) Based on the paper we studied, there are positive and negative lessons that we should pay attention to. We hope to foresee certain related circumstances that may happen and sort out the problems in advance. We also hope the government can bring out solutions in pro-active way. 

4) We urge feasible studies has to be done, a group of panels should be organized including government officers, by partisans and NGOs. 

5) Based on the study, there are too many unkown parameters and dynamic changes for HSR project, we would like to know structure and design, construction cost, partnership, connectivity, economic and regional impacts, profitability......accordingly of Malaysia HSR project. The government is responsible to clarify clearly and to be transparency in disclosing relevant information to the public. 

6) Finally, we would like to emphasize that as this mega project is related to the whole nation and taxpayers, it is necessary to explore and reserach in-depth before implementing. 

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Part A

A. Motivation 
Japan: 1) high traffic demand

           2) Reduce travel time

           3) Rapid economic growth with large metropolitan centres

France: 1) high traffic demand

             2) Reduce travel time

             3) Connect cities of significant size

             4) Relief congestion of railway

             5) Profitable with the link with Paris

Germany: 1) freight transportation

                 2) Profitable for freight traffic

Spain: 1) political rationale (Expo’92) 

           2) Promote economic growth

           3) neither choose congested corridor nor connect populated cities

Italy: 1) low share of rail traffic

         2) Air transport is not convenient for main cities due to short distances

A.1 Demand

Japan         √

France       √

Germany   √

Spain         X

Italy          √ 

A.2 Development & sustainability of corridor   (* mega cities originally)

Japan: Tokyo*

           Osaka*

           Nagoya

France: Paris*

             Lyon*

Germany: North-South (industrial corridor)

Spain: Madrid*

           Seville

A.3 Competition 

1)Its comparative advantage would seem to lie on routes that range from between 100 to 500 miles. Over shorter distances, HSR finds it difficult to compete with road transportation, while over longer distances air transportation takes the upper hand. 

2) France: HSR influences air traffic 

3) Spain: HSR influences air traffic

A.4 Freight or Passengers?

Japan: Freight and passengers

France: Passengers

Germany: Freight and passengers

Spain: Passengers

Italy: Passengers

Part A Questions:

1) What is the motivation of Malaysia building HSR? Do we have demand? 

2) How is it compatible to Malaysia economic development? 

3)  How does Malaysia HSR system effect the usage of road transportation and air transportation?

4) How about the influence on Singapore-KL direct flight route?

5) Is the HSR fare competitive with air traffic or road transportation?

6) What kind of plan should be made to be feasible and profitable in order to break even the cost spent? 

7) How is the calculations of construction cost, operational cost and profits and returns of SG-KL HSR route? 

8) What kind of services do Malaysia HSR plan for? Freight or passengers? 

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Part B 

B.1 Connectivity
Germany: 1) operational deficits due to widespread of population and small size of cities

                 2) high regional transportation cost

                 3) negative commercial speed

1)low population densities lead to higher accessibility needs, which usually result in high regional transportation costs and shorter distances between stations, which in turn negatively affect commercial speed. 

2)Singapore possesses good connectivity already, there are 3 MRT lines connected with HSR terminal at Jurong East, playing as a transportation hub with well-planned and well-executed project.

B.2 Partnership

Japan: Private

France: Public

Germany: Public

Spain: Public with high subsidies

Italy: Public-Private (when the private firm withdrew their capital from the partnership, the private share was acquired by State Railway in 1998, ending with the government increased higher subsidies)

United States: Private firm but applied USD 1.5 billion loan from the Federal Railroad Administration, paid back with interest over 25 year. It was considered as kind of taxpayer funding. 

B.3 Political pressure

Japan: Leading to financial crisis in 1987 

German: Leading to construction overruns

Spain: To fulfill the political aim 

Part B Questions:

1)We urge the government to disclose the details of partnership contract and must be transparency.

2) Will the toll fee of North-South highway be increased due to the minimum profits / returns promised by government to the highway company?

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 Part C

C.1 Structural design & Economic cost

Germany: 1) multipurpose HSR system

                 2) Serve freight traffic more

                 3) Upgrade existing line

                 4) Give up commercial speed

C.2 Construction cost

Japan: 1) High land price

Germany: 1) high upgrading & operating cost

                 2) Construction cost overruns due to building delay

                 3) Increase in construction cost due to natural terrain, urban structure

                 4) Dual function

Italy: 1) increase in construction cost

C.3 Profitability

	Japan  (Tokyo-Osaka)	France (Paris-Lyon)	German  (Koln-Frankfurt)	China (Beijing-Shanghai)
Population (million)	Tokyo : 35  Osaka : 18	Paris : 12  Lyon : 2	Koln : 1  Frankfurt : 5	Beijing : 24  Shanghai : 34
Annual passengers usage (million)	155 (2014)	20 (2010)	9 (2010)	7440.2 万 (2013)
Total population (million)	127 (2014)	66 (2014)	80 (2014)

Ridership/year:-
Japan: 155 mil (2014)
France: 20 mil (2010)
             - Profitable with min 12% return
Germany: 9 mil (2010)
                 - high turnover on freight transport
Spain: 1.4 mil (1995)
           - only small population being served
           - high subsidy, low profitability
           - high investment, low profitability 

Things to note:
1) The annual passengers usage of France HSR system is 20 mil in 2010. Malaysia SPAD estimated Malaysia HSR system will obtain 24 mil ridership annually. However, due to the large population of France (66 mil) and well-connections of transportation within nationwide, France HSR system satisfies population demand and is profitable with min 12% returns.

2) The annual passengers usage of Spain HSR system is 1.4 mil in 1995. The population of main cities of HSR route is 13.4 mil (Madrid, Barcelona and Sevilla) in total. This statistic is similar to SG-KL HSR route with 13.7 mil (Kuala Lumpur, Johor Bahru and Singapore) in total. It should be taken note that there is poor performance due to low volume of traffic and the potential demand does not compensate for the high investment in Spain case. While Malaysia possesses smaller population (23.5 mil), Spain has larger population (46.5 mil), it is necessary to doubt the estimation of annual ridership of SG-KL HSR route (24 mil) whether it is viable.

C.4 Tunnel effect / territorial polarization
Japan: 1) services industries concentrated in Tokyo and Osaka

           2) Employment fall in Nagoya, increase in Osaka, Kyoto and Kobe

           3) Retail industry in Tokyo 

- The fall in employment in Nagoya was estimated at around 30% from 1955 to 1970. The increase in employment in Osaka, Kyoto and Kobe was 35%. 

France: 1) Paris grows larger as a metropolitan centre

             2) there is no economic growth in weak economic cities

             3) Paris as centralization of transportation hub, population, economic service

C.5 Population growth

Japan: Shows no significant relationship with the establishment of HSR stations

Spain: 1) no population growth 

           2) no housing growth

C.6 Economic impact

Japan: 1) employment growth 

           2) Land value increase

           3) Services, retails, tourism industry growth

           4) increase in business trips

           5) decrease in overnight stays

France: 1) increase traffic volume

             2) increase in business trips

             3) decrease in overnight stays

             4) no impact on economic growth outside Paris

             5) Lyon has better image in attracting firm establishment

Germany: 1) freight transport contributes more turnover
2) Operational deficits due to low population densities, urban structure and high connectivity cost

Spain: 1) small traffic, low profitability

           2) no economic growth

           3) no new firm establish

           4) better cities images

Singapore planned: -economic hub

                                -transportation hub

                                -offices, retails, hotels 

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Discussions:
1) Since the case of Japan shows that services, retails, tourism industry grow due to HSR stations building, the government should carry out a plan to boost these several sectors.

2) According to the case of France, big city such as Lyon has better image in attracting third sector firms - mainly regional offices from Paris- that improves Lyon's image, the government can thus consider to launch out a plan which can promote cities' images with HSR stations.

Similar situation happened in Spain, while there is no positive economic growth in Spain, there are better cities' images brought by HSR stations building.

3) Based on the case of Germany, freight transport contributes more turnover, the government can consider to provide freight services with HSR system. I believe this is a beneficial plan if Malaysia HSR can carry out freight services. 

While Singapore is the financial centre and transportation hub, by accelerating volume of trading with freight services can further enhance the financial competitiveness of KL.

4) As citizen / users, we hope the HSR fares can be cheaper than air fares so that it is affordable to most of the people. 

5) Singapore case: 
*Singapore already announced their plan on Jurong East HSR terminal: 

                                                       -economic hub

                                                       -transportation hub

                                                       -offices, retails, hotels

* Singapore possesses good connectivity already, there are 3 MRT lines connected with HSR terminal, playing as a transportation hub 

- We can see that Singapore is very cautious and experiencing low risk in building HSR system while there is only one station in the city-state and it is the terminal of SG-KL route. However, there are many HSR stations in Malaysia with no regional plans for each station until now.

6) Nusajaya case: 

- If the government plans to boost the economic growth of Nusajaya, there is already case study showing that there will be a failure if the motivation is only economic growth, the government need to reconsider and calculate the benefits / economic impacts of HSR station. 

- Japan and France with high passengers usage is mainly due to the huge demand on HSR to travel between mega cities. Are there really mega cities or metropolitan centres available in our country to fulfill sufficient ridership in order to break even the construction cost and operational cost?

- Singapore has already well-planned for Jurong East terminal in services, retails, tourism, business, hotels sectors which has already proved to be beneficial in economic growth of HSR stations area. How is the planned development of Nusajaya in accordance with HSR station building?

- Based on the Germany case, there is operational deficits on connectivity. Due to low population densities of small towns and widespread of towns, it increases operational cost in arranging connectivity from towns to towns or towns to HSR stations. 

If the connectivity is not good: it is time consumed and is difficult to compete with air transport

If the connectivity is good: it is costing by bringing people from JB to Nusajaya. And Germnay case is already the lesson. (However, Germany gains returns from freight transportation) 

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Conclusion:
1) The government needs to well-plan the project before implementing.

2) The government needs to explain clearly to the public about HSR project.

3) The government must be transparency in details of partnership contract and calculation of costing.

4) The government needs to consider the arrangement of connectivity and existing transportation means of each HSR stations and regional impacts. The public have the right to know the details of regional plans before executing.

5) The government needs to clarify the motivation and economic impacts brought by HSR stations before launching out the project.

6) The government should make full efforts to minimize negative impacts as this project is related to the people.