HSR bridge link for Nusajaya-Jurong East

By Sharen Kaur
Published in NST on May 18, 2015

SINGAPORE: MALAYSIA and Singapore will build a bridge to link Nusajaya in Johor and Jurong East for the high-speed rail (HSR) connection instead of an undersea tunnel as it will cost five times less.
 
  Malaysian High Commissioner to Singapore, Datuk Husni Zai Yaacob, said based on current estimates, the HSR line between the two points would be 15km.
 
  A 15km rail line from Nusajaya to Jurong East will cost RM1.2 billion to RM1.5 billion while an undersea tunnel of the same length will cost about RM6.5 billion.
 
  Husni said Malaysia and Singapore were on target to ink the bilateral agreement for the HSR link by the end of this year, which would lead to the opening of tenders.
 
  "Basically, it will be the start of the implementation process. Because the HSR link involves two countries, it is very complex. Between now and the end of this year, there will be a lot of discussions.
 
  "We hope to resolve many issues pertaining to the development. The key issues include the alignment.
 
  Once we have sorted that out, we will iron out the location of the customs, immigration and quarantine facilities, and the tenders.
 
  "We will also discuss funding options, technical aspects of the HSR and the company that will operate the service," he said after opening Eco World Development Group Bhd's first international sales gallery, here, last week.
 
  Husni said the HSR link would be a game changer for Malaysia and Singapore as it would provide seamless connectivity. He also said the link was important to improve both countries' economy and strengthen bilateral ties.
 
  "Everybody, including the Singaporeans, are looking forward to it. Singapore is committed to this development. The Singapore government has announced the terminus in Jurong East and that is a clear signal that it wants the HSR to be implemented as soon as possible.
 
  "Since the retreat more than a week ago between both countries' leaders, there has been positive coverage in the Malaysian and Singapore press." Husni said the HSR link would provide a transit service that would take two hours and an express service at 90 minutes.
 
  "The express service will operate between Bandar Malaysia and Jurong East while the transit service will stop in Putrajaya, Seremban, Ayer Keroh, Muar, Batu Pahat and Nusajaya, meeting demand from all segments of the market." Malaysia has confirmed that its terminus will be in Bandar Malaysia, about 4km from the Kuala Lumpur financial district.

`1MDB assets have strong value'

By Sharen Kaur

SINGAPORE: PEOPLE should look at 1Malaysia Development Bhd (1MDB) as a company with strong asset value instead of focusing on its debt level, top banker Datuk Seri Nazir Razak said.
 
  He, however, urged 1MDB to come clean with its financials and build back people's trust.
 
  "If you look at their books, at some level it is sustainable. We shouldn't just look at their debt. We should also look at the company's balance sheet and assets.
 
  "Some RM40 billion or RM50 billion of debts are not a lot. 1MDB has strong assets to back them. They have power plants, as well as the Tun Razak Exchange (TRX) and Bandar Malaysia developments.
 
  "The thing now is, 1MDB should come clean with their financials. They should have an independent body to look at their numbers and get to the bottom of things quickly," said Nazir, who is chairman of CIMB Group Holdings Bhd.
 
  He was speaking during a media luncheon at the Asean Business Council (ABC) Forum 2015, here, yesterday. CIMB is one of the main sponsors of the event.
 
  1MDB's current debt level is RM42 billion. It has power assets and landbank worth about RM50 billion.
 
  The TRX and Bandar Malaysia developments are expected to rake in an estimated gross development value of RM190 billion collectively over 20 years.
 
  To pare down its debt, 1MDB is planning to list its energy unit, Edra Global Energy Bhd, later this year to raise around USD3 billion (RM10.7 billion).
 
  Nazir felt that the controversy arose because 1MDB's board and management were "not equating".
 
  "If the board really have been doing their job, then they should have appointed an independent auditor to view their numbers. Why did they have to wait for the auditor-general or PAC (Public Accounts Committee) to come in?
 
  "We hear a lot of noise in the social media about 1MDB and the company has gone silent. And then we have the Tabung Haji transaction.
 
  The company should just get to the bottom of things quickly." He said if anyone had any concern about CIMB's financials, he would appoint an independent auditor.
 
  "I will appoint an independent auditor, who is not my auditor, to look at the numbers so that I have two credible auditors saying these are the numbers. This is something all companies should do."
 
  On Monday, PAC chairman Datuk Nur Jazlan Mohamed said it would begin its 1MDB probe on May 19.
 
  1MDB chairman Tan Sri Lodin Wok Kamaruddin has said it would extend its cooperation to PAC.

Booming cross-border ventures

By Sharen Kaur

THE warming bilateral relations between Singapore and Malaysia can only bode well for the country, with huge investments pouring in.
 
  Both countries achieved economic milestones with the announcement of the high-speed rail network linking Kuala Lumpur and Singapore and the mass rapid transit link from Johor Baru to Woodlands.
 
  There is also the largest joint-venture project in Malaysia by Temasek Holdings (Private) Ltd and CapitaLand Ltd. Temasek is the sovereign wealth fund of the government of Singapore while CapitaLand is one of Asia's largest real estate companies.
 
  For CapitaLand, its two core markets are Singapore and China, while Indonesia, Vietnam and Malaysia have been identified as new growth markets.
 
  Besides Singapore, Malaysia receives huge investments from China, Vietnam, Hong Kong, Europe and the United States.
 
  Bloomberg has rated Malaysia as the world's fifth most promising emerging market this year, the only Asean country in its top 10 list.
 
  Malaysia is ranked alongside Asia's developed markets, such as Japan, Hong Kong and Singapore, by the Asian Corporate Governance Association.
 
  The co-founder of Transparency International, Michael Hershman, has praised Malaysia as "a friendly country to do business in".
 
  Apart from Temasek and CapitaLand, Singapore tycoon Peter Lim is also investing heavily in the multibillion-ringgit Motorsports City project in Gerbang Nusajaya, Iskandar Malaysia. It will include a Formula One-compliant racing test track as well as showrooms, garages and entertainment outlets spread over 109ha.
 
  There are also investments by Pulau Indah Ventures Sdn Bhd - a 50:50 joint venture between Khazanah Nasional Bhd and Temasek - which is developing the multibillion-ringgit "Urban Wellness" project, a 2ha site in Medini North; and the "Resort Wellness" development, a 85ha site in Medini Central, both located in Iskandar Malaysia, Johor.
 
  Meanwhile, t he investment amount of RM811 million from CapitaLand marks the group's first direct large-scale township investment and development in Malaysia.
 
  Temasek and CapitaLand will develop a S$3.2 billion (RM8.6 billion) township in Danga Bay, one of five flagship zones in Iskandar Malaysia, and about 10km from the Johor Causeway.
 
  The 29ha site will be turned into a waterfront residential community comprising high-rise and landed homes, as well as a marina a shopping mall, restaurants, serviced residences, offices and recreational facilities.
 
  But that is not all from CapitaLand, which has been expanding its presence here through its wholly-owned serviced residence business unit, The Ascott Limited, since a few years ago.
 
  It also counts CapitaMalls Malaysia Trust (CMMT) as among its listed real estate investment trusts.
 
  CMMT, which was listed on the Main Market of Bursa Malaysia on July 16 2010, is Malaysia's only "pureplay" shopping mall REIT with an income-and geographically-diversified portfolio.
 
  It has a market capitalisation of more than RM2.5 billion and its portfolio - comprising Gurney Plaza in Penang, an interest in Sungei Wang Plaza here, The Mines in Selangor and East Coast Mall in Kuantan - has been independently valued at about RM3.2 billion.
 
  The manager of CMMT is Capita-Malls Malaysia REIT Management Sdn Bhd, which is 70 per cent owned by CapitaLand Retail RECM Pte Ltd and the rest by Malaysian Industrial Development Finance Bhd.
 
  Munwar Basha, who is Ascott area manager for Malaysia, said the group was increasing both its investment and presence in the country.
 
  "Demand for quality accommodation in Malaysia has been growing strongly as the country continues to attract foreign direct investment. We will continue to seek opportunities to expand and strengthen our leadership position in Malaysia," he told Property Times.
 
  In 2014, Malaysia's foreign direct investment grew more than eight per cent to RM64.6 billion from 2013.
 
  Munwar said Ascott had expanded its presence in Sabah and Sarawak by securing a management contract for a 253-unit serviced residence - Citadines Waterfront Kota Kinabalu in Sabah.
 
  It would be the first international brand of serviced residence in Sabah when the property opens in early 2018, he said.
 
  Munwar said with the management contract, Ascott reinforced its lead as the largest international serviced residence owner-operator in Malaysia with over 2,000 apartment units across 10 properties in Malaysia.
 
  Ascott currently operates six properties here, namely Ascott Kuala Lumpur, Ascott Sentral Kuala Lumpur, Somerset Ampang Kuala Lumpur, Citadines DPulze Cyberjaya, Somerset Puteri Harbour Nusajaya and Citadines Uplands Kuching.
 
  It will open four more by 2019, including the property in Kota Kinabalu. The rest are Somerset Medini Nusajaya by Pulau Indah Ventures Sdn Bhd, which is a joint venture between Khazanah Nasional Bhd and Temasek; Somerset Damansara Uptown Petaling Jaya by See Hoy Chan Sdn Bhd, and Citadines Medini Nusajaya by United Malayan Land Bhd.
 
  Citadines Waterfront Kota Kinabalu is part of an integrated development that includes a retail mall with supermarket, food and beverage outlets as well as offices.
 
  The project is owned by Titijaya Land Bhd while Ascott is only managing the serviced residence component, which has a gross development value of RM97 million.
 
  "We will invest if we see value in having a serviced residence in a certain location. The investment amount will depend on the opportunity available. Different cities and locations will have different cost structures pertaining to land, properties and even construction cost," Munwar said.

Eco World set for new growth phase

By Sharen Kaur

KUALA LUMPUR: ECO World Development Group Bhd, which has projects worth almost RM62 billion, will enter a new growth phase with a total of RM2.8 billion raised from a corporate exercise.
 
  The Main Market-listed developer has completed the last leg of its corporate exercise following a 20 per cent share placement to institutional investors, which has raised RM638.35 million.
 
  Its earlier subscription of shares and rights issues with warrants were completed in February and March, respectively.
 
  President and chief executive officer Datuk Chang Khim Wah said with the completion of the entire exercise, Eco World was wellplaced to forge ahead with its growth and expansion plans to achieve its RM7 billion sales target for this year and next.
 
  Eco World has accumulated 2,122.57ha of landbank with a total remaining gross development value of RM61.2 billion to be developed.
 
  The group has presence in the Klang Valley, Iskandar Malaysia in Johor and Penang with a total of 15 projects that comprise affordable, upgrader and luxury homes, integrated high-rise developments and green business parks.
 
  Through its associates, the Eco World brand has also extended to the United Kingdom and Australia with several exciting developments in London and Sydney lined up for launches this year.
 
  Eco World is expected to list its special-purpose acquisition company (SPAC), Eco World International Bhd, in the second half of this year.
 
  The SPAC, which will raise funds to acquire the assets in London and Sydney as well as other potential properties, is expected to raise about RM1.5 billion.
 
  Eco World has proposed to subscribe for a 30 per cent stake in the enlarged paid-up capital of the SPAC upon completion of the latter's listing for an indicative consideration of RM562.5 million.
 
  Meanwhile, the 20 per cent share placement will see 394.04 million new shares issued at a subscription price of RM1.62 each. This represents an 8.5 per cent discount to Eco World shares' closing price of RM1.77 on Thursday.
 
  The issue price also represents a discount of 9.86 per cent to Eco World's five-day volume weighted average market price of RM1.79 up to and including Thursday.
 
  In a statement yesterday, Eco World said the share placement was subscribed 1.41 times, with significant orders from long-term institutional investors.
 
  The exercise had attracted strong demand from local and foreign investors, it added.
 
  Eco World chairman Tan Sri Liew Kee Sin said the 1.41 times subscription indicated a strong vote of confidence in EcoWorld by institutional investors, given the current tough market condition.
 
  The stock closed two sen higher at RM1.95 yesterday.

Sarbini returns to KTMB as president, CEO

By Sharen Kaur

KUALA LUMPUR: A former senior staff member of Keretapi Tanah Melayu Bhd (KTMB), Sarbini Tijian, has been appointed as the new head to help the national railway company return to the black.
 
  Sarbini, who was KTMB general manager for intercity service strategic business unit and executive vicepresident (business), has been appointed company president and chief executive officer (CEO) by the Finance Ministry effective May 1. He will start work tomorrow.
 
  Sarbini replaces Datuk Elias Kadir, whose contract ended last Thursday.
 
  KTMB's debt had risen to more than RM2 billion despite attempts to cut cost and increase revenue.
 
  Elias had faced opposition from the Railway Union of Malaya, which has more than 5,000 members.
 
  "There have been many attempts to revive KTMB without the need to privatise. KTMB needs to improve its overall operation to become a profitable entity. A substantial amount is needed to upgrade the tracks, coaches and locomotives, as well as the signalling and communications system to operate more efficiently," said a source.
 
  "Sarbini may have to tackle several issues at the start of his term before anything can be resolved in KTMB. He has the knowledge and experience, as well as support from KTMB."
 
  Since KTMB's corporatisation in 1992, its audited collective revenue as of December 31 2013 was RM7.4 billion.
 
  However, during the same period, KTMB recorded collective losses amounting to RM2.5 billion.
 
  KTMB chairman Datuk Nawawi Ahmad told Business Times recently that the company needed a turnover of RM650 million to RM700 million to break even.
 
  Its operating revenue of RM137.80 million in 2013 was lower than its RM550.70 million operating cost, mainly due to low ridership, tonnage, tariff and charge rate.
 
  Last year, KTMB recorded a revenue of RM370 million while losses were about RM80 million.

MMC, partners close in on HSR

By Sharen Kaur

KUALA LUMPUR: MMC Corp Bhd and its Japanese partners are finalising details to form a consortium to bid for Malaysia's first high-speed rail (HSR) system, which will link Kuala Lumpur and Singapore.
 
  Business Times understands that MMC is working with East Japan Railway Co (JR East) and Sumitomo Corp to bid for the HSR project, which is estimated to cost RM40 billion.
 
  The amount includes RM10 billion to buy high-speed bullet trains.
 
  It is learnt that MMC, JR East and Sumitomo have inked a memorandum of understanding (MoU) to work together on the rail job.
 
  JR East executive director for Singapore office, Yutaka Nomoto, said: "We had proposed our idea for the HSR project to the Malaysian government in 2013 and presented it to the Land Public Transport Commission. MMC will undertake the civil works while Sumitomo will be the project coordinator.
 
  "JR East will contribute in terms of operations and maintenance. We are working with Sumitomo, Hitachi Ltd and Mitsubishi Heavy Industries Ltd for the systems portion."
 
  Yutaka was speaking on the sidelines of a railway conference here, last month.
 
  He said JR East would also provide the rolling stocks for the HSR development as well as training for Malaysians on operating a highspeed rail system.
 
  "We are coming into Malaysia for the first time. This is one of the biggest railway developments and it is feasible. We will bring in expertise from Japan." The HSR project is among the key issues Prime Minister Datuk Seri Najib Razak and his Singaporean counterpart Lee Hsien Loong will be discussing at a two-day leaders' retreat this week.
 
  Other issues are easing congestion at checkpoints and Malaysia's proposal for a new bridge.
 
  The proposed HSR link is targeted for completion in 2020 and will reduce the 350km journey over land to 90 minutes from about five hours.
 
  The proposed rail stops are Bandar Malaysia (Kuala Lumpur), Seremban (Negri Sembilan), Ayer Keroh (Malacca), and Muar, Batu Pahat and Nusajaya (Johor), while in Singapore, it may be in Tuas West, Jurong East or the city centre.
 
  Business Times had reported that more than five groups were vying for the HSR project, including the YTL Corp Bhd and China Infraglobe-Global Rail Sdn Bhd consortium.
 
  Government investment arm Khazanah Nasional Bhd is also interested in the project and its involvement could be via UEM Group Bhd, in which it holds a substantial stake.
 
  New alignments have been proposed by several parties, which will include land acquisition and relocation of squatters.

RM1.2b boost to Eco World cash coffers

By Sharen Kaur

SINGAPORE: ECO World Development Group Bhd has received total cash of RM1.2 billion from its corporate exercise and will see part of the proceeds going towards spearheading its 15 development projects in Malaysia, says its chief.
 
  The Main Market-listed property developer had raised a total of RM2.8 billion from a private placement this year for expansion.
 
  "As a property developer which likes quick turnaround, we now have more cash to finance the development of our projects in Malaysia. The corporate exercise had reduced our gearing to 0.5 times.
 
  "We have more exciting announcements coming soon," chairman Tan Sri Liew Kee Sin said after the official opening of the group's first international sales gallery on St Martin's Drive, here, yesterday.
 
  Eco World's market capitalisation now stands at about RM4 billion.
 
  It has about 2,100ha of land bank in Klang Valley, Penang and Johor, with a total remaining gross development value of RM65 billion to be developed.
 
  Liew said Eco World will launch several new projects in Malaysia in the next few months.
 
  These include Eco Terraces in Penang, the luxury Eco Sanctuary township in the Klang Valley, as well as the RM5 billion Eco Tropics and Eco Business Park III in the Pasir Gudang growth corridor in Johor.
 
  Eco World is targeting total sales of RM7 billion this year and next year, with about 15 per cent coming from foreign property buyers, mainly Singaporeans, said Liew.
 
  "We are delighted to be able to grow the EcoWorld brand further in Singapore and hope that our presence here will make it more convenient for our customers and prospective buyers who would like to know more about EcoWorld.
 
  "The sales gallery will feature all projects under the Eco World umbrella in Malaysia, London, the UK, and Sydney, Australia. This year we will launch RM1.8 billion worth of properties in Iskandar Malaysia and expect majority sales to come from Singapore," said Liew.
 
  He noted that out of the RM3.2 billion in total sales achieved last year, RM1.8 billion was derived from Iskandar Malaysia, mostly from local and Singaporean buyers.
 
  Eco World president and chief executive officer Datuk Chang Khim Wah said the establishment of EcoWorld Gallery @ Singapore was a natural choice considering the city state's importance as a global economic and financial hub, its proximity to and close business ties with Malaysia.
 
  The opening of the sales gallery was officiated by the High Commissioner of Malaysia to Singapore Datuk Husni Zai Yaazob.
 
  Husni viewed the venture by Eco World as a step forward not only for the group but for Malaysia to improve bilateral ties with Singapore.
 
  "Despite the current setbacks such as cooling measures by the government and the implementation of the Goods and Services Tax, Iskandar Malaysia was still attracting foreign direct investment," he said.

5 firms to vie for next Kwasa Damansara project

By Sharen Kaur

PETALING JAYA: Johor Land Bhd, MKH Bhd, Naza TTDI Sdn Bhd, Paramount Corp Bhd and TH Properties Sdn Bhd will fight it out to secure the next project at Kwasa Damansara in Selangor.

   

  They are the five pre-qualified tier 2 developers that have bid for the residential development in the RM50 billion township.

   

  Tier 2 developers are companies with shareholders' funds or paid-up capital of RM300 million and above.

   

  Kwasa Land Sdn Bhd had called for a request for proposal (RFP) for a partner for the proposed 5.08ha residential development, called project R2-1, based on the approved planning.

   

  People with knowledge on the matter said project R2-1 was expected to generate a gross development value (GDV) of about RM900 million.

   

  Upon completion, Kwasa Land was expected to reap an income of about RM100 million, the sources told Business Times.

   

  While the five bidders have paramount exposure in developing a diverse range of properties, they have to compete based on the qualitative and quantitative criteria spelt out in the RFP.

   

  Under the qualitative evaluation, tenderers are required to submit development concept and layout proposals for the R2-1 parcel based on approved density, development phasing, and unique features of the proposal, complete with overall planning layout, 3D massing and landscape plans.

   

  For the quantitative evaluation, tenderers are required to submit the tender price on a per square foot basis along with their financial feasibility analysis.

   

  In a statement yesterday, Kwasa Land said all tenders would be evaluated by an independent team comprising marketing consultants, architects and other professionals.

   

  Kwasa Land, a wholly-owned unit of the Employees Provident Fund and master developer of the 932ha Kwasa Damansara township, said the R2-1 project must be fully completed within six years.

   

  It said R2-1 was next to project MX-1 (the town centre), in which there would be two mass rapid transit stations. R2-1 will also front a 13.6ha thematic town park.

   

  Besides tier 2 developers, the township development is open to tier 1 builders with shareholders' funds or paid-up capital of RM1 billion and above, and tier 3 Bumiputera firms with shareholders' funds or paid-up capital of RM1 million and above.

   

  Malaysian Resources Corp Bhd will develop the town centre, which will have a GDV of more than RM8 billion. Impiana Land and Development Sdn Bhd will undertake the first Bumiputera development known as project R3-2 on 3.5ha with GDV of RM400 million.

   

  Kwasa Land said it would soon call for two more RFPs for residential developments.

IJM joins race for Line 3's PDP role

By Sharen Kaur

KUALA LUMPUR: IJM Corp Bhd has emerged as the latest contender for the role of project delivery partner (PDP) for the proposed RM9 billion light rail transit Line 3 development linking Bandar Utama to Klang.
 
  It is understood that IJM bought the tender document on April 10 and is eyeing the PDP role with its partly-owned unit, Scomi Group Bhd, which has Scomi Engineering Bhd as its subsidiary.
 
  "Both IJM and Scomi Engineering have rail expertise to carry out the PDP role for Line 3. They may give the Malaysian Resources Corp Bhd-George Kent (M) Bhd consortium, which remains the favourite for the deal, a run for their money," a source said.
 
  MRCB-George Kent and IJM are among seven firms shortlisted by Prasarana Malaysia Bhd, the project owner.
 
  The others are MMC Corp Bhd, UEM Builders Bhd, the Naza Engineering and Construction (Naza E&P) Sdn Bhd-CSR Zhuzhou Electric Locomotive Co Ltd consortium, Sunway Bhd and the WCT Bhd-AlloyMtd group.
 
  The 36km Line 3 will have 25 stations, including one underground. It is expected to be operational in 2020.
 
  Sources said around 25 companies had submitted proposals for the PDP role. Among those voted out were YTL Corp Bhd, Systra from France and Caf of Spain, said another source.
 
  "It is strange that YTL Corp was disqualified despite building and operating the Express Rail Link between Kuala Lumpur Sentral in Brickfields and Kuala Lumpur International Airport and Kuala Lumpur International Airport 2.
 
  "The concern is that among the seven qualified groups, only George Kent and IJM have experience in railway matters.
 
  "The rest are civil engineering firms and they have no experience in systems engineering, which includes track work, power supply, signalling and communication.
 
  "We understand that some of the parties are talking to Global Rail Sdn Bhd to be the systems integrator so they would have a complete package.
 
  "They have about two months to submit their respective proposals for the PDP role. The fee structure should be a minimum six per cent and it comes with the risk to deliver," the source said.
 
  Global Rail is a railway engineering firm founded by veteran Fan Boon Heng, who previously headed ABB Daimler-Benz Transportation and later Balfour Beatty Rail Sdn Bhd for about 20 years.
 
  Meanwhile, the PDP concept was first used for the Klang Valley mass rapid transit line from Sungai Buloh to Kajang. MMC Corp and its partner Gamuda Bhd were given the PDP role for the MRT and MRT 2 lines.
 
  Under the MRT agreement, the PDP will receive a fee of six per cent of the total aggregate work package contract value. It will get the full fee should the total cost of the project be less than or equal to the target cost.
 
  But if the project cost exceeds the target cost, the PDP fee shall be reduced in accordance with an agreed formula.

'KL-S'pore high speed rail round trip to cost less than RM400'

By Sharen Kaur

KUALA LUMPUR: THE price of a return ticket from Kuala Lumpur to Singapore on the high-speed rail (HSR) will be less than RM400, says Land Public Transport Commission (SPAD) chief executive Mohd Nur Ismal Mohamed Kamal.
 
  Mohd Nur Ismal said the ticket would be priced affordably so that all segments of the market - from business and leisure to tourism - could travel comfortably.
 
  The HSR is expected to cut the travel time between Kuala Lumpur and Singapore to 90 minutes, from about five hours now.
 
  The Malaysian terminus will be located in Bandar Malaysia, about 3km from Kuala Lumpur's financial district, while Singapore's will be located at the current site of the Jurong Country Club in Jurong East.
 
  Rumours abound that prices could range between RM600 and RM800.
 
  A Singapore daily reported yesterday that industry players were estimating ticket prices at between S$80 (RM216) and S$90 for the 350km trip.
 
  Comparatively, the price of a standard full-fare HSR ticket from Taipei to Kaohsiung - for a distance of about 345km - is T$1,630 (RM189).
 
  "We foresee a much lower average price to make the HSR project feasible. It would cost less than RM200 for a single trip. Although the return on investment will take a longer time, the operator will have several options to recoup its investment in the project.
 
  "The company will be allowed to take on yield management similar to how an airline operates. This is one area we are looking at and it will not be strictly regulated like our LRT (light rail transit) and train services.
 
  "With the HSR link, we can expect a massive boost to our tourism industry.
 
  "It would allow tourists to visit Malaysia and Singapore as one package," Mohd Nur Ismal said.
 
  The ambitious rail link, billed as a "game-changer", will be completed later than the originally targeted 2020 deadline.
 
  At an annual retreat recently, Prime Minister Datuk Seri Najib Razak and his counterpart Lee Hsien Loong said the 2020 deadline was unrealistic owing to the scale and complexity of the 350km route.
 
  A new target date will be announced after both sides have agreed on all major issues of the project.
 
  Business Times reported a few years ago that it could cost the Malaysian government around RM40 billion to build the HSR link, including RM10 billion to buy high speed bullet trains.
 
  There are also proposals from several government-linked companies and private parties that claim they can build the HSR link and buy the bullet trains for less than RM20 billion.

MAS expected to sell A380s only as last resort

By Sharen kaur

KUALA LUMPUR: Malaysia Airlines (MAS) will most likely not put up for sale all the six A380 super-jumbo planes that it owns, but it could come as a final resolution to save the national carrier, sources said.
 
  Business Times understands that newly-appointed chief executive officer Christoph Mueller is looking at keeping most of the Airbus A380s to serve the airline's highest-performing routes.
 
  MAS inked a contract with Airbus to buy the six planes in 2003. The first A380 was delivered in May 2012.
 
  The aircraft's list price in 2012 was USD389.9 million (RM1.4 billion).
 
  The national airline is using the A380s, which can carry 494 passengers, on its Paris flights and the Kuala Lumpur-London route.
 
  It is learnt that the current average passenger load for the Paris and London flights is about 80 per cent.
 
  "The London and Paris routes are among the most profitable for MAS.
 
  Many people love the A380 and actively seek the plane when they fly.
 
  There have been cases when MAS had to offload passengers.
 
  "While selling the A380s will generate cash flow to cover losses, or a wet lease can dress up the financials, MAS is studying other profitable routes that it currently does not serve, and may use the jumbo planes when it makes a decision to fly there.
 
  "It is looking at routes that its foreign rivals are making a good return on investment," sources told Business Times.
 
  It was reported that MAS planned to sell all of its A380s or lease them in a bid to reduce operational cost, which was much higher than its peers.
 
  In response, Mueller, who formerly helmed Aer Lingus, had said MAS was still exploring fleet options to enhance viability of long haul sectors.
 
  "MAS needs to operate and utilise its fleet at an optimum level besides maximising revenue on the route it flies. The market needs to give MAS room to explore various options in determining the most viable strategy," he said.
 
  It was also reported recently that MAS might take the A380 jumbo planes off the KL-Paris route next month.
 
  According to Aviation International News, MAS plans to offer the aircraft for lease on the open market and downgrade the aircraft used on the Paris flight to Boeing 777-200ERs.
 
  In February, Turkish Airlines was reportedly looking to lease two A380s from MAS.

YTL still interested in KL-Singapore HSR project

By Sharen Kaur

KUALA LUMPUR: YTL Corp Bhd is still keen to pursue the development of the high-speed rail (HSR) linking Kuala Lumpur and Singapore on a private sector funding model.

   

  Group managing director Tan Sri Francis Yeoh had said during the large track session with more than 40 analysts and fund managers at Invest Malaysia last week it would remain fairly competitive if the rollout of the HSR project followed the private sector model.

   

  Yeoh said YTL's express rail link (ERL) concession had been a success and was a good benchmark for the group's cost competitiveness for other major rail jobs, including the HSR.

   

  Malaysia and Singapore announced in 2013 that they would embark on the 400km HSR link but did not provide any timeline.

   

  The announcement marked the first definitive agreement to proceed with the rail project.

   

  YTL mooted the idea to build a HSR link from Kuala Lumpur to Singapore in the late 1990s, and proposed it again in 2006.

   

  Yeoh had said in 2006 he would take the rail unit public to raise as much as RM8 billion to fund the project if he won the contract.

   

  However, the project was put on hold in April 2008 due to high cost.

   

  However, since then, several other groups had proposed their ideas to the government.

   

  Business Times reported that the link would now cost about RM40 billion.

   

  KLSE Invest said YTL's unchanged strategy to pursue the HSR project on a private sector funding model was highly encouraging, considering the lack of visibility from the authorities on the timeline for the implementation of the rail development.

   

  "Yeoh did argue that YTL's ERL concession was a good benchmark for its cost competitiveness for other major rail jobs. This was no surprise, given YTL's RM35 million cost/km for the ERL, which translates into an estimated total cost of the HSR that is about half of the widely reported cost of RM30 billion to RM40 billion," it said.

   

  Analysts are recommending a "buy" on YTL, with the target price of between RM2.30 and RM2.70.

   

  During the large track session, YTL shared with investors its longerterm strategy for growth.

   

  Domestic ventures driven by the private sector are the likely anchors for the group's outlook over the next two years.

   

  Yeoh also said there were huge opportunities to grow its infrastructure segment.