Sources: The Star Online (Choong Khuat Hock)
A KL-Singapore high-speed rail would generate more economic benefits than the double-tracking railway from Ipoh to Thailand
WITH negative export growth and private consumption, fiscal stimulus is playing a more important role. In Japan, building bridges to nowhere has not generated long-term economic benefits but has instead burdened future generations.
In Malaysia, building a double-tracking railway from Ipoh to the Thai border for RM12bil can never generate as much economic benefits as a high-speed rail (HSR) from Kuala Lumpur to Singapore for around the same price tag. (Please vote or express your views on the blog
http://klsingaporehsr.blogspot.com/)
Malaysia appears to be far behind in HSR development. China has completed six high-speed rail projects with design speeds of up to 250km/h and in July 2008, it completed the 108km Beijing to Tianjin HSR with a design speed of 350km/h.
This would be equivalent to travelling from KL to the Malacca border in 30 minutes. The 1,302km Beijing to Shanghai HSR will be ready next year.
China’s HSR network of 6,000km by 2013 will exceed Japan’s current HSR network of 2,459km. France, with an HSR network of 1,700km, has the most extensive HSR network among European countries followed by Britain (1,400km), Germany (1,290km) and Spain (1,272km).
Even the United States is jumping on the HSR bandwagon with Obama unveiling plans for 10 potential high-speed intercity corridors.
Other Asian countries that have successfully built HSR include South Korea and Taiwan. Interestingly, the 335.5km Taiwan HSR from Taipei to Kaohsiung (taking 90 minutes) is approximately similar in distance from KL to Singapore. I was able to buy tickets and board the train 10 mins before departure.
The train ride was very smooth and the speedometer on the train showed train speeds of close to 300km/h. As in Taiwan, the HSR in Malaysia could have direct services from KL to Singapore and also services that cover KL International Airport (KLIA), Malacca and Johor. Malacca’s tourist potential will be enhanced while Iskandar Malaysia’s viability will be improved.
The positive economic impact from the HSR from KL to Singapore would be tremendous. It would anchor KLIA-LCCT-Changi as the top airline hub in South-East Asia where foreign and domestic passengers will have a choice of full service or budget airlines.
The HSR may attract additional visitors to the KL-Singapore hub due to the clustering effect. Furthermore, it would boost the number of Singaporean and foreign visitors (from Singapore) visiting Johor, Malacca and Kuala Lumpur.
Airline frequency between KL and Singapore may decline but airlines could generate additional traffic from the cementing of KL-Singapore as the premier transportation hub of the region. Property prices in Kuala Lumpur should also benefit from greater demand from Singaporeans and foreigners who are attracted by the improved accessibility of KL.
With better accessibility, foreign companies may be attracted to place their operations in KL or Iskandar where operating costs are lower. The better accessibility would also make it easier to attract talent to work in KL or Iskandar.
The high-speed Eurostar train link from London to Paris in just 2.5 hours has helped narrow the discount of Parisian property prices to London property prices.
The differential between KL and Singapore property prices remains large with high-end condos in Malaysia going for around RM1,000 per sq ft while high-end Singapore condos are at least five times more expensive at over S$2,000 per sq ft.
Based on an estimated built-up area of 1.8 billion sq ft in the Klang Valley, property values could be boosted by a massive RM180bil if property values rise by RM100 per sq ft and the gain could rise to RM360bil if property prices appreciate by RM200 per sq ft. The positive wealth effect is an important ingredient for better consumer confidence.
Asian giants like China and India are increasingly dominating the economic field, hence, there is a greater urgency for Malaysia and Singapore to work together to carve out a niche (while it still exists) as the indisputable destination for investments, tourism, services and selected manufacturing in the Asean region.
Since the energy consumption per person using a train is less than those for cars and planes, the HSR will lead to lower carbon dioxide production, which contributes towards global warming. The KL-Singapore HSR will reduce the number of cars and planes plying between KL and Singapore and reduce road accidents.
Should the Malaysia and Singapore governments decide to carry on with the HSR, it is important for the project to be implemented by a group that can build the HSR within the stipulated cost and as quickly as possible.
We cannot afford another Port Klang Free Zone where massive cost overruns and accusations of misdemeanors in a privatised project have burdened taxpayers without any tangible economic benefits.
The Taiwan HSL was plagued with delays and severe cost overruns. The final cost at a staggering US$15bil (RM55bil) equates to a cost of US$45mil per km compared to US$27mil per km in South Korea and only US$12mil for the express rail link to KLIA which was built by a YTL-led consortium.
As a Malaysian consumer, I am very keen on being given the choice to travel on HSR to Singapore even if it costs more than the bus fare. As a taxpayer, I am keen on taxpayers’ money being spent on infrastructure projects that generate economic returns.
Economically-viable private sector-funded investments should be encouraged at a time when government finances are tight. As a property owner in KL, I am keen to see better property prices and KL becoming a vibrant international city with excellent connectivity. What do you think?
Showing posts with label Singapore. Show all posts
Showing posts with label Singapore. Show all posts
Monday, July 20, 2009
Wednesday, July 15, 2009
Economists: Jump in Singapore’s GDP one-off
Sources: The Star Online (FINTAN NG)
PETALING JAYA: Singapore may have seen some stabilisation in economic numbers following a big jump in its second-quarter gross domestic product (GDP) by 20.4% on an annualised basis, but it will not be sustainable as the country’s economy is still reliant on exports.
Economists believe the country’s economic recovery, as with the rest of Asia would hinge on demand for the region’s exports from the G3 nations comprising the United States, Japan and the European Union.
Standard Chartered Bank economist Alvin Liew said given the way Singapore’s economy was structured; with a reliance on exports, there would still be a decline for the year although it had stabilised compared with the last quarter of 2008 and the first quarter this year.
He said Singapore’s second quarter GDP growth was the exception rather than the rule compared with the rest of South-East Asia because a substantial portion of the manufacturing sector comprised pharmaceuticals.
Singapore’s trade and industry ministry released the country’s GDP data yesterday that showed pharmaceuticals helped to boost growth in the second quarter with manufacturing falling only 1.5% year-on-year against a contraction of 24% in the previous quarter.
Besides the positive picture in manufacturing, construction rose 18% while services dropped 5.1%.
“Pharmaceuticals make up more than 20% of Singapore’s manufacturing sector, with the exception of Japan, that’s not the case for most of Asia,” Liew told StarBiz.
Both United Overseas Bank Ltd economist Ho Woei Chen and Oversea-Chinese Banking Corp Ltd treasury research and strategy head Selena Ling said the performance of the pharmaceuticals segment was not representative of the economy.
“It’s very difficult to see as the figures are very volatile and swing from month to month.
“If we take the segment out, the electrical and electronic segment is still contracting as there’s no demand,” Ho said.
She has revised the GDP figures for the year upwards to a contraction of 5% compared with a drop of 7.5% earlier.
“We’re still seeing a fall in the services sector due to a lack of domestic demand. Only the financial services segment is supporting the sector but the rest of the sector is still down,” Ho said.
Ling said there could be any number of reasons for the jump in pharmaceutical output. “It could be due to the A (H1N1) flu pandemic,” she said.
She added that given the low base in the second-half of last year, it was likely that there would be a recovery at the end of this year.
Meanwhile, Morgan Stanley Research analysts led by Tan Deyi said in a report that with the second-quarter GDP advance estimate, the first half was now tracking at a contraction of 6.7% year-on-year.
“We’re marking to market our 2009 GDP forecast from minus 10% year-on-year to minus 5% year-on-year to take this into account,” she said.
Tan said that the forecast for the year incorporated a gradual turnaround in the non-pharmaceuticals segments but also assumed a certain normalisation of pharmaceuticals output in the second half.
“With the bottom now behind us, the focus has shifted from how deep and how long to what kind of recovery,” she said.
PETALING JAYA: Singapore may have seen some stabilisation in economic numbers following a big jump in its second-quarter gross domestic product (GDP) by 20.4% on an annualised basis, but it will not be sustainable as the country’s economy is still reliant on exports.
Economists believe the country’s economic recovery, as with the rest of Asia would hinge on demand for the region’s exports from the G3 nations comprising the United States, Japan and the European Union.
Standard Chartered Bank economist Alvin Liew said given the way Singapore’s economy was structured; with a reliance on exports, there would still be a decline for the year although it had stabilised compared with the last quarter of 2008 and the first quarter this year.
He said Singapore’s second quarter GDP growth was the exception rather than the rule compared with the rest of South-East Asia because a substantial portion of the manufacturing sector comprised pharmaceuticals.
Singapore’s trade and industry ministry released the country’s GDP data yesterday that showed pharmaceuticals helped to boost growth in the second quarter with manufacturing falling only 1.5% year-on-year against a contraction of 24% in the previous quarter.
Besides the positive picture in manufacturing, construction rose 18% while services dropped 5.1%.
“Pharmaceuticals make up more than 20% of Singapore’s manufacturing sector, with the exception of Japan, that’s not the case for most of Asia,” Liew told StarBiz.
Both United Overseas Bank Ltd economist Ho Woei Chen and Oversea-Chinese Banking Corp Ltd treasury research and strategy head Selena Ling said the performance of the pharmaceuticals segment was not representative of the economy.
“It’s very difficult to see as the figures are very volatile and swing from month to month.
“If we take the segment out, the electrical and electronic segment is still contracting as there’s no demand,” Ho said.
She has revised the GDP figures for the year upwards to a contraction of 5% compared with a drop of 7.5% earlier.
“We’re still seeing a fall in the services sector due to a lack of domestic demand. Only the financial services segment is supporting the sector but the rest of the sector is still down,” Ho said.
Ling said there could be any number of reasons for the jump in pharmaceutical output. “It could be due to the A (H1N1) flu pandemic,” she said.
She added that given the low base in the second-half of last year, it was likely that there would be a recovery at the end of this year.
Meanwhile, Morgan Stanley Research analysts led by Tan Deyi said in a report that with the second-quarter GDP advance estimate, the first half was now tracking at a contraction of 6.7% year-on-year.
“We’re marking to market our 2009 GDP forecast from minus 10% year-on-year to minus 5% year-on-year to take this into account,” she said.
Tan said that the forecast for the year incorporated a gradual turnaround in the non-pharmaceuticals segments but also assumed a certain normalisation of pharmaceuticals output in the second half.
“With the bottom now behind us, the focus has shifted from how deep and how long to what kind of recovery,” she said.
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