By Sharen Kaur - January 26, 2024
KUALA LUMPUR: Japanese companies such as East Japan Railway are not keen to take part in Malaysia's multi-billion ringgit bullet train project because there is no government funding available to support the development.
Sources with knowledge on the matter said that since the Request for Information (RFI) document was released in July of last year, not a single Japanese company had paid RM20,000 to purchase it.
"The Japanese companies didn't purchase the RFI documents because they already knew there would be no government funding. Therefore, the reports of them dropping out of the KL-Singapore HSR are misleading," a source with links to Japanese firms told Business Times.
It was reported that Japanese companies had withdrawn their bids to build the KL-Singapore HSR due to worries about the Malaysian government's lack of funding support.
According to reports from Japan, several companies, such as East Japan Railway, had intended to bring the country's Shinkansen, or bullet train, and systems into the KL-Singapore HSR project.
However, they concluded that investing would be too risky without government support
From its initial agreement between Malaysia and Singapore in 2013, the KL-Singapore HSR has encountered multiple obstacles.
It was cancelled in 2020 and then revived in July of last year.
Malaysia hopes to avoid using public funds for the construction of this latest attempt by financing it through private investment.
Japanese companies' abandonment of the high-speed line brings more concern to the project given the country's long-term interest in the idea, including a visit by its then Transport Minister Keiichi Ishii in 2015 to pitch the Shinkansen system to officials.
Besides East Japan Railway, it was reported that trading house Sumitomo had also shown interest in supporting the project during its initial proposal.
"The Japanese companies are not keen simply because they would rather invest their funds and resources in countries that are expanding their railway networks and where government funding is involved.
"Look at what the Japanese are doing in India. In India, the government bears direct responsibility for railway development, whereas in Malaysia, funding must come from private sources," the source said.
In the city of Surat in the western state of Gujarat, the first trial run of the 508-km line, which is modelled after Japan's Shinkansen and constructed with Japanese assistance, is scheduled for 2026.
The line connecting Mumbai, the commercial hub in the state of Maharashtra, with Ahmedabad in Gujarat, will have trains hitting speeds of up to 320 kph, reducing the train travel time between the two cities from over six hours to under three hours.
The 1.08 trillion rupee project, of which the Japan International Cooperation Agency is reportedly paying 81 per cent of the cost at an interest rate of 0.1 per cent, has about 45,000 people working on the line.
Source: https://www.nst.com.my/business/corporate/2024/01/1005807/why-japanese-firms-not-keen-malaysias-bullet-train-project
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