JAKARTA -- Japan and China are set to clash over the right to build a 1-trillion-yen high speed rail project connecting Malaysia and Singapore.
Malaysia and Singapore signed a memorandum on July 19 stating that they would aim to open the new line connecting Kuala Lumpur and Singapore around 2026. Trains travelling at maximum speeds of at least 300 kilometers per hour are expected to make the some 350 kilometer trip in about 90 minutes -- a major improvement over the three to four hours it now takes by airplane, including getting to and from the airports. Seven stations for the new train line are to be constructed in Malaysia and one in Singapore.
From July 21 through 23, Japan's Minister of Land, Infrastructure, Transport and Tourism Keiichi Ishii visited both countries and met with officials. He promoted Japanese bullet train technology and safety, which has over 50 years of operational experience under its belt. At the same time in Singapore, East Japan Railway Co. (JR East) was among companies that participated in a high-speed rail symposium, as the Japanese public and private sectors cooperate to advertise Japanese train technology.
Meanwhile, China views the Malay Peninsula as a strategic linchpin in its plan for a "Belt and Road" economic zone stretching all the way to Europe. The opportunity to build a high-speed rail system that runs up and down this peninsula is something it cannot ignore.
China Railway Group Ltd., a major infrastructure builder in China, announced in December last year that it would invest 7.4 billion ringgits, or about 185 billion yen, into redevelopment plans for Kuala Lumpur. The Kuala Lumpur terminal for the planned high-speed rail line is expected to be built within the redevelopment area, meaning China has leveraged its economic power to put itself ahead of Japan for the rail project bid.
In its high-speed rail projects both within and without its borders, China has used redevelopment of the areas around train stations to raise land prices and make back part of the construction costs, and it may intend to do the same for the Malaysia-Singapore project. Other countries including South Korea have also shown interest in bidding to build the line.
Malaysia and Singapore plan to establish a binding legal agreement on the project within the year. Both countries are to be involved as equals, so they will have to be able to effectively work out problems when their interests clash. There are also technical hurdles that must be overcome to smooth out immigration procedures.
Japan and China also competed in another high-speed rail bid last year, in Indonesia. While Japan had the lead through advertising its technological expertise, China came from behind to win the bid by offering extensive financial support. Now, for the Malaysia-Singapore project as well, political and economic moves will likely join technological prowess as keys to winning the bid.