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.