Will Tun Mahathir, as the new prime minister of Malaysia, delay or cancel the High Speed Rail between Singapore and Kuala Lumpur?
I expect him to delay this project. If he does it, I will understand that this decision is not taken against Singapore.
Malaysia has serious financial problems. The new government had promised to abolish the GST (but Tun had said that they will reinstate the previous sales tax). This is still a considerable loss of revenue for the government.
I agree with the decision to abolish GST, because it is a bad and wasteful tax and had caused considerable hardship to the people.
So, it will make sense for the government to delay the High Speed Rail until the finances of Malaysia are stronger.
However, there is a chance that he might proceed with the project. It is an important infrastructure that will lead to the development of Malaysia. Most developed countries have a high speed train network.
There are two ways for the new government to manage the funding of this project.
a) They can issue bonds for private investors to provide the funding. The bonds can be guaranteed by the government, so that the interest payable can be modest.
b) They can control the money that is spent on the infrastructure. There is no need for the project to be so expensive. I expect that it can be reduced by 30% to 50% (this is just a guess). At a lower cost, it should be possible to make the project viable and for the train fares to be affordable.
I know that most countries overspend on their infrastructure. They pay more than is necessary. The overspending is due to lax control. By following the wrong specification (which are recommended by the consultants), the project cost is inflated.
There is also a tendency to favor cronies in the consultancy and construction fields. The cronies will give someback back in return. This is the nature of large scale projects in most countries.
If a country can have a better system to manage the cost, it should be possible to bring down the project cost by 30% to 50%.
My statement applies to Singapore as well. For example, Singapore recently bought 17 trains for $250 million. I worked out that the cost per cabin (each train has 3 to 6 cabins) is $3.6 million. I asked - why do we have to pay $3.6 million for a cabin?
I believe that it should be possible to get a train cabin for half of this cost, and meet the expected standard of safety and reliability, perhaps without the unnecessary luxury.
Managing cost is largely a matter of applying common sense and asking the right questions to the consultants, who are the real experts. These consultants need to be managed, so that they do not write the specifications to favor their friends.
I now come back to the High Speed Rail. I hope that the Tun Mahathir can introduce changes that will bring down the cost of the project considerably and make it viable for the project to be funded by private investors.
The High Speed Rail is important for the development of Malaysia. It will also encourage more travel between the people of both countries and will help to strengthen understanding and friendship. .
Tan Kin Lian
I expect him to delay this project. If he does it, I will understand that this decision is not taken against Singapore.
Malaysia has serious financial problems. The new government had promised to abolish the GST (but Tun had said that they will reinstate the previous sales tax). This is still a considerable loss of revenue for the government.
I agree with the decision to abolish GST, because it is a bad and wasteful tax and had caused considerable hardship to the people.
So, it will make sense for the government to delay the High Speed Rail until the finances of Malaysia are stronger.
However, there is a chance that he might proceed with the project. It is an important infrastructure that will lead to the development of Malaysia. Most developed countries have a high speed train network.
There are two ways for the new government to manage the funding of this project.
a) They can issue bonds for private investors to provide the funding. The bonds can be guaranteed by the government, so that the interest payable can be modest.
b) They can control the money that is spent on the infrastructure. There is no need for the project to be so expensive. I expect that it can be reduced by 30% to 50% (this is just a guess). At a lower cost, it should be possible to make the project viable and for the train fares to be affordable.
I know that most countries overspend on their infrastructure. They pay more than is necessary. The overspending is due to lax control. By following the wrong specification (which are recommended by the consultants), the project cost is inflated.
There is also a tendency to favor cronies in the consultancy and construction fields. The cronies will give someback back in return. This is the nature of large scale projects in most countries.
If a country can have a better system to manage the cost, it should be possible to bring down the project cost by 30% to 50%.
My statement applies to Singapore as well. For example, Singapore recently bought 17 trains for $250 million. I worked out that the cost per cabin (each train has 3 to 6 cabins) is $3.6 million. I asked - why do we have to pay $3.6 million for a cabin?
I believe that it should be possible to get a train cabin for half of this cost, and meet the expected standard of safety and reliability, perhaps without the unnecessary luxury.
Managing cost is largely a matter of applying common sense and asking the right questions to the consultants, who are the real experts. These consultants need to be managed, so that they do not write the specifications to favor their friends.
I now come back to the High Speed Rail. I hope that the Tun Mahathir can introduce changes that will bring down the cost of the project considerably and make it viable for the project to be funded by private investors.
The High Speed Rail is important for the development of Malaysia. It will also encourage more travel between the people of both countries and will help to strengthen understanding and friendship. .
Tan Kin Lian
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