Cost Benefit Analysis Of High Speed Rail Between Kuala Lumpur

925 Words Dec 2nd, 2015 4 Pages
Cost-Benefit Analysis of the High Speed Rail between Kuala Lumpur – Singapore

In 2013, Malaysia and Singapore jointly announced to build a high-speed rail line, which runs at 300 km/hour or above, between Kuala Lumpur (KL) and Singapore by 2020. The planned high-speed-rail between two capital cities is intended to ease the road congestion and meet the increasing transport demand between two capitals while shorten travel time to as little as 90 minutes. Given the 7.1 million populations of KL and Singapore combined, the Land Public Transport Commission of Malaysia claimed that a total of 66000 passengers would be traveling daily via the propose HSR (24 million annually). The figure may be reasonable, however, it should to be treated with caution.

Given an estimated cost of US$11 billion cost, financing the KL-Singapore HSR projects remains the biggest challenge. Given that the development cost are high and return on investment will be a long-term basis, some level of government funding may be necessary. For instance in 2009, one of the largest built-operates-transfer HSR government joint operating company in Taiwan has recently reached out to its government for assistance due to the enormous debts it carries. With debts ratio roughly equal to two thirds of its capitalization, the company was only able to break even once in 2008, leading to the possibility of bankruptcy. (Yu, 2010) Although the HSR project is a bilateral project, most of the construction will be situated…

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