Transport consultant Rosli Khan called the business plan “unsustainable”, saying it may be premised on an overestimation of the profitability of both projects.
He said these projects may no longer be viable given the prevailing economic conditions.
“Economic uncertainties in the post-pandemic world, such as inflation, supply chain disruptions and fluctuating market conditions, could lead to cost overruns for both the Bandar Malaysia and the HSR projects, making it difficult to generate the expected returns,” he told FMT.
Rosli also pointed to a shift in transportation patterns following the Covid-19 pandemic, pointing in particular to a rise in remote work and reduced business travel.
“This may reduce the expected demand for travel, affecting the financial viability of the HSR project,” he said.
Meanwhile, economist Geoffrey Williams warned that the government could be forced to undertake yet another bailout if either project fails to meet its financial or development goals.
“This takes resources from essential public priorities in health, education and social protection,” he said, adding that everyone would be “worse off”.
Last week, former transport minister Wee Ka Siong proposed aligning the HSR project with the RM140 billion Bandar Malaysia development to enhance its benefits and feasibility.
Wee said with proper execution, the profits derived from the Bandar Malaysia project could be sufficient to cover all or a significant portion of building the HSR.
First announced in 2011, Bandar Malaysia located at the Sungai Besi air base in Kuala Lumpur was envisioned as a mixed-use transit-oriented development and was expected to integrate various transportation networks, including the HSR.
However, the HSR project was put on hold in 2018 over cost concerns, before being officially terminated on Jan 1, 2021.
When tabling the 2024 budget last year, Prime Minister Anwar Ibrahim said his government was committed to reviving the HSR project subject to the availability of a viable financial model involving private sector participation to ensure its feasibility and sustainability.
Why all this talk of HSR again?
Rosli, however, questioned the push for the upscale housing project and the HSR, saying the needs of the broader population must be given priority. He said the Klang Valley is already grappling with issues such as congestion, flooding and rising living costs.
“And yet we want to build the HSR and more up-market housing. Who are we building these for,” he asked.
Williams questioned the rationale behind a revival of the HSR project.
“If HSR was feasible, it could be run by the private sector. It is not feasible, which is why the private sector is not funding it,” he said.
“If Bandar Malaysia proves successful, why would you throw good money after bad investments into the HSR?”