Samirul Ariff Othman, an adjunct lecturer at Universiti Teknologi Petronas, said MRCB’s withdrawal was likely a calculated move on the company’s part given the high costs and uncertainties surrounding the project.
“Large infrastructure projects are marathons, not sprints – they demand enormous upfront capital, long gestation periods, and a stomach for political and economic turbulence.
“For MRCB, the numbers might not have added up, or perhaps the risk-reward ratio tilted too far into uncertainty.
“Add to that the lingering spectre of governance issues and shifting political priorities, and their decision starts to look less like a retreat and more like prudence,” said Samirul, who is also a senior consultant with Global Asia Consulting.
However, he said MRCB’s withdrawal does not necessarily mean the company is shutting the door on the HSR project altogether. Instead, it merely indicates that the company is not keen to participate in the project at its development stage, which he described as the “riskiest”.
Samirul said the transnational project, if completed, could present lucrative downstream opportunities in operations, maintenance and transit-oriented development (TOD) around key stations.
“MRCB is no stranger to TOD projects, having previously developed hubs like Kuala Lumpur Sentral, Malaysia’s largest transportation hub.
“Leveraging its expertise, MRCB could pivot its strategy towards station development, property management, or even retail and commercial space operations within the HSR ecosystem.
“These roles are typically less capital-intensive, come with more predictable revenue streams, and play to MRCB’s strengths in urban development and infrastructure management,” he added.
Malaysia and Singapore formally agreed to develop the project in February 2013, when Najib Razak was the prime minister. The project was initially slated for completion within 13 years.
The HSR was originally intended to have key stations in Kuala Lumpur, Putrajaya, Negeri Sembilan, Melaka and Johor.
However, the project was terminated after the Pakatan Harapan government, led by then prime minister Dr Mahathir Mohamad, came into power in 2018. Putrajaya was required to compensate Singapore the sum of S$102.8mil for costs incurred.
Last week, MRCB confirmed the termination of a teaming agreement it had with a consortium led by the Berjaya Group. The consortium was set up to put together a non-binding conceptual proposal for MyHSR Corporation Sdn Bhd regarding potential strategic opportunities.
According to reports, MRCB, which carries an AA-IS rating, likely withdrew from the multi-billion ringgit project given the massive financial risks which the company’s shareholders, which include the Employees Provident Fund, Retirement Fund Inc (KWAP) and Tabung Haji, would have been exposed to.
Reports have also suggested that MRCB, which has spearheaded large transport infrastructure projects such as the development of LRT3, made its decision after rumours suggested that a joint venture between YTL Construction and SIPP Rail would likely win the bidding exercise.
Following MRCB’s withdrawal, the consortium now consists of Berjaya Rail Sdn Bhd, Keretapi Tanah Melayu Bhd, IJM Corp Bhd, Deutsche Bahn, Hitachi Rail and Hyundai Rotem.