Monday, June 04, 2018
TOTD: The High Speed Rail
Thought of the Day - The High Speed Rail
Some people ask me what do I think of Tun Mahathir cancelling the High Speed Rail project
Well first of all, we must understand that with such high price tag, it is bound to lose money for a long time to come if it was to be built, especially when it needs to compete with the current air flights between KL and Singapore.
Secondly, although most of the rail and stations were situated in Malaysia, Singapore will benefit most from its construction. This is basically why PAP Government is willing to foot half of the cost of constructing the HSR.
PAP will benefit from the shot up in land prices around Jurong area and it will make it easier for Singapore to attract Talents from Malaysia to come and work in Singapore.
However, it is obvious that PAP Government is facing grave cash flow problem despite of its boast of having huge reserves. Huge mega projects like HSR, Tuas Mega port, T5 @ Changi Airport, New Thomson MRT line etc... are creating an obvious pressure on the government finances, so much so that PAP is planning to raise taxes as well as borrowing to fund all these.
Why would all these multi billion dollars projects come all at once, at the expense of Singaporeans in terms of higher taxes?
Thus in my view, Tun Mahathir had made a timely wise decision to call off the HSR. Of course he did it for the consideration of his country's financial position but indirectly, he will also help Singapore to pause and think whether such mega project is really necessary for the time being.
Going for an expensive HSR which is destined to lose money will only serve the ego of PAP but will bleed us in the long run.
A medium speed rail may be more practical, cost effective and sustainable in the long run.
As for penalty, I would say that in consideration of Malaysia being our closest neighbor and it is struggling with the financial situation in the aftermath of GE14, its current financial and overall stability will also be our Core interests as well. Apart from being a gesture to rebuild our relationship with the new administration, it is also in our interest to see a stable and smooth transition of Powers in Malaysia. We will not be spared if Malaysia face a financial crisis.
Thus, in the spirit of maintaining the legality of contract and rule of law, I would suggest Singapore to impose only a token of fees for the breaking of contractual obligations by the new Malaysian administration.
Goh Meng Seng