“Over the years, one of the problems that we face for the Malaysian government is high-debt ratio … we intend to reduce this debt,” he told This Week in Asia during a sit-down interview.
“So with such mega infrastructure projects, we hope that the private sector will take it up, but of course, with a sustainable model,” Loke said. “We do not want to end up with a huge financial obligation for the government.”
The HSR project is not expected to come cheap. Some projections put the costs as high as 100 billion ringgit (US$21.3 billion), though the government has not confirmed a specific budget.
“As of now, our principle still stands. That is, we want the private sector to take the lead for this project,” Loke said.
The link aims to slash travel time between Malaysia’s capital Kuala Lumpur and Singapore from around four hours by road to just 90 minutes by rail. It is due to open in 2026.
However, the project was cancelled in January 2021, in part due to its multibillion-dollar price tag, despite its potential to become a key link in a Beijing-backed network of high-speed rail lines connecting southern China to Singapore.
But Malaysia appears committed to resurrecting the project, with the nation’s newly inaugurated king in January saying that it would be a priority of his five-year term.
This comes as Malaysia looks to improve its transport network and catch up with some of its regional peers, including Indonesia and Thailand, in terms of rail connectivity.
In January, news agency Kyodo reported that several Japanese firms had opted out of partaking in the HSR project over financial risks that could come from a lack of government funding.
The firms, which included the East Japan Railway Company, were looking to adopt Japan’s shinkansen bullet train models in Malaysia, the Kyodo report said, citing sources in both Japanese and Malaysian governments.
But Loke said it was “inaccurate” to say that these companies had pulled out of the project, because Malaysia had not yet opened a tender process.
Some companies might have exited during the request for information process which was launched last July, he said, because they felt they were “not in the position to provide a proposal”.
“Of course we accept that,” he added. “But there is enough interest from other consortiums from other countries, and local companies in Malaysia, to take part in the project.”
09:13
Malaysia’s transport minister eyes partnerships with China to drive infrastructure goals
Malaysia’s transport minister eyes partnerships with China to drive infrastructure goals
Reports suggest that three consortiums have been shortlisted for the HSR project, including two local joint ventures and one Chinese consortium, said to be led by state-owned China Railway Construction Corporation.
While Loke did not confirm which companies were shortlisted, he said the government was evaluating a number of strong proposals.
Once these are confirmed, Malaysia will open formal discussions with Singapore, and the city state will then decide if it wants to get involved in the project.
In August, Singapore said it would be open to discuss new proposals from Malaysia and approach the project with a “clean slate”. Back in 2021, when Malaysia had cancelled the project, it paid Singapore a compensation fee of more than S$100 million (US$74 million).
“We need to have further discussions at the government level … before we come to a conclusion on how we bring a proposal forward,” Loke said. “Once that is done, we need to start talking to the Singapore side, because this project involves two countries.”