The Link between Singapore Malaysia High Speed Rail and Surrounding Properties

Steps are being taken to make the high speed rail connecting Singapore to Kuala Lumpur in Malaysia a reality. A memorandum of understanding has already been signed by the prime ministers of both the countries. It is expected that the rail link will be ready for use by the year of 2026. This can certainly reduce the travel times between the cities significantly. At the same time, it is certain to have other effects on both the countries.

Facts about the High Speed Rail Link

In order to oversee the development of the high speed rail link between the countries, MyHSR Corp was set up. The aim of the rail link is to bring about an improvement in the connectivity between the two countries. Currently, road traffic between Singapore and Malaysia is served by the Johor–Singapore Causeway. However, the congestion in the Causeway is quite acute because the traffic is far higher than the capacity.

As such, the primary objective of the high-speed rail (HSR) project is to decrease the travel time between the two cities of Kuala Lumpur and Singapore. These two cities are among the fastest growing economic regions of Southeast Asia. As such, a stronger link between them will be beneficial to the region as a whole.

So far, the memorandum of understanding between the countries has been signed by Prime Minister Lee Hsien Loong of Singapore and Prime Minister Najib Razak of Malaysia. Additionally, it has been mentioned by MyHSR Corp that the joint tender for the project will be launched in the last quarter of 2017. As for the contract award, it a decision is expected to be made by the two countries by the end of 2018.

The time required is certainly considerable but that is to be expected. Developers will have to check the actual alignment of the project and then prepare the tender submissions accordingly. That is why the tender will be launched near the end of 2017. One year will be given to the developers to make the submissions. Only then can the evaluation can be performed.

It is being expected that the rail link will be ready by 2026. The rail link will extend for 350 km between the cities. Once completed, the travel times between the two cities will be reduced to only 90 minutes.

There is certainly strong interest in the multi billion dollar project from companies in China, South Korea and Japan. The project was first announced over 3 years ago and the interest has considerably increased since then.

Several parameters will be taken into account before the winning developer is selected. It will not just be the cost of the project. The reliability, value and sustainability aspects will also be taken into account. Moreover, there is no guarantee that the best submission will be from Asian countries. Agencies from European countries can also enter the tender.

The viability of the project should not be an issue. Singapore has a population of more than 5 million while Kuala Lumpur has a population of around 7 million. As such, the operator of the high speed rail link will not face any problems in increasing the ridership by providing attractive fares. The ticket prices of the rail are not going to be regulated. Nonetheless, they are going to be bench marked against the most inexpensive airline tickets.

Facts about the Construction and Development of the Project

The HSR is certainly going to be a project of massive proportions. As such, questions about its feasibility and other aspects are certain to arise. The prime ministers of Singapore and Malaysia did face questions about the project when the memorandum of understanding was announced.

International tenders will be required for various aspects of the project such as rail assets companies and assets operating companies. As such, the selection process must be fair, open and transparent so that the tenders are awarded to the best bidders. According to the Prime Minister of Singapore, this is one item which needs to be settled.

Discussions have taken place between the countries as to the structure of the projects and how the tenders are going to be called along with the sequence of their calls. The structure must be correct in regards to the evaluation of the tenders and the packages. The execution and the evaluation have to be done properly so as to make sure that the best value is being got. Both countries will be working together to find a solution to this. Due the significant international interest garnered by the project, both countries have to make sure that the process is transparent and fair

The Effects of the HSR on Property Sector

The high speed rail link between Kuala Lumpur and Singapore is certain to have effects on various businesses and industries. Many of them are going to benefit significantly. The real estate market will be leading in terms of the benefits derived from the project.

Apart from the property industry, the construction industry will also benefit from the project directly. After all, a huge number of residential areas and properties will be built directly from the nodes of the project. Moreover, the project can also serve as a platform for foreign investors to start investing in Malaysia and Singapore.

There can be a rise in properties aimed especially for the low-income group. The train will be especially beneficial for the low-earning groups in Malaysia to travel to Singapore in search of work.

The property value of the lands located in the nodal towns will certainly increase due to the presence of the line. After all, these towns will benefit from their proximity to the stations. The demand for ownership and land is going to rise as well. Some of the areas that will experience an increased demand include Klang Valley, Johor apart from all the other nodal stops along the route.

This can bring about the creation of several new housing estates along the route of the rail. They will be a spillover from the property market in Singapore. It is not only Singaporeans or Malaysians who will be able to take advantage of this effect. Property investors from foreign shores can also make use of this opportunity.

Tourism is another area which is certain to benefit both countries. In fact, the tourism industry may experience expansion as well. While Malaysia will experience this particular benefit, the fact is that it will be a bigger benefit to Singapore. After all, this country also has several well-developed tourism centers.

Several new tourist spots are certain to be developed along the rail. This, in turn, can spur further growth and bring in more business for the real estate development and construction industries. These areas are certain to attract interest from foreign investors as well due to the increasing market opportunities.

The multiplier effect is another benefit that can be experienced due to the project. After all, businesses in Malaysia will be able to shift to Singapore easily. They can shift their headquarters, operations or both easily to Singapore. In the meantime, they can keep their warehouses and factories in the nodal areas of Malaysia. Of course, this is also applicable to the foreign and international investors as well. As a result of these moves, the demand for residential units will certainly increase. The value of the residential units is going to rise as well due to the higher demand.

The Economic Benefits of the HSR

In the case of a project of this scale, there is certain to be benefits to the economy. The high speed rail is certain to affect the economies of both countries. There are several ways this can take place.

One of the biggest advantages of this project is in the field of skills transfer. Singapore is still behind Malaysia when it comes to experience with the technology used in high speed rail systems. As such, the project can prove to be massive opportunity for the industry in Singapore to build their expertise with the technologies. Moreover, manpower can be developed in this sector. A platform for the further development and implementation of the technology can be created as a result of this project as well.

The job opportunities are one of the direct beneficial impacts which will be made by the HSR. After all, manpower will be necessary during the construction phase. Once constructed, manpower will be necessary to operate the rail and keep the system operational. There will be a major increase in the number of job opportunities available.

There will be an indirect way in which the job opportunities increase after the creation of the rail system. There will be several industries affected by the creation of the rail. Industries such as hospitality, tourism, logistics and retail will experience growth due to the rail link. With the growth, there will be more jobs available.

There is another effect of the link which needs to be considered. Once created, it becomes possible for professionals and businessmen to work in one country while living in another. After all, the hassles involved in travelling between the countries will be decreased considerably along with the time and money required.

As a result, a person can easily choose to work in Singapore and then go back home in Malaysia. This is going to be the case especially for the low income professionals. After all, they will not be able to afford the residential units in Singapore which are typically expensive. On the other hand, the properties in Malaysia are cheaper. As such, it can be beneficial for them.

Business activities will also start to flow from Singapore into Malaysia. Shopping malls, retail shops, and other business properties can start growing in towns and areas that are close to the rail stops in Malaysia. Johor, especially, is likely to benefit the most due to this effect. The growth rate of Johor and other areas will increase as a result. There are Singaporeans living in Johor but the numbers are likely to rise once the rail link is completed.

The market base for the Singapore Changi International Airport is going to increase as well. After all, there will be more travelers flying to Singapore. Businessmen may find it more convenient to travel to Kuala Lumpur from Singapore via the rail link after flying in to Changi. This will be especially beneficial for those who have business in both countries. The same is applicable to foreign tourists.

As such, Changi may experience an increase in the number of international flights once the rail link is completed. It may even start serving more destinations worldwide. The Changi Airport will need to be expanded in order to accommodate the increasing demand.

On the other hand, there can be a negative effect on airlines when the rail link is completed. Many travelers may find the high speed rail to be more convenient to them due to the lesser prices involved in the travel. As a result, AirAsia and other airlines that run a direct flight service between the two countries can experience a decrease in the demand for the flights. The reduction in the numbers of air travelers can be a problem for the airlines. As such, they must innovate to ensure that they are still relevant when the rail link is completed.

There are several macroeconomic benefits to the creation of a rail link. For starters, there is convenience of becoming closer. People living in Kuala Lumpur and Singapore will end up being only 90 minutes away from each other. This is not only extremely quick but, more importantly, very affordable. As such, it becomes a lot easier to get in touch with those living in the other country.

Residents will be able to make new friends from the other country or run a business. In short, it becomes easier to become a single integrated economy. This can have untold benefits for tourists, businesses and investors who will be able to access both destinations in a short time, cheaply.

PROPERTY LAUNCHES & INVESTMENTS

Property Launches & Investments

The Link between Singapore Malaysia High Speed Rail and Surrounding Properties

Facts about the High Speed Rail Link

Facts about the Construction and Development of the Project

The Effects of the HSR on Property Sector

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