Straits Times Interactive, 5 July 2006
Company expects to reach agreement on high-speed railway in two years, says MD
KUALA LUMPUR - YTL, owner of the railway from Malaysia's Kuala Lumpur International Airport to the city, said it is in talks with the Malaysian government for a high-speed rail link to Singapore.
The company plans to take the rail unit public to raise between RM6 billion and RM8 billion (S$2.6 billion to S$3.5 billion) to fund the project if it gets the concession for the line to Singapore, 300km from Kuala Lumpur.
'Our government is very serious about this and they're encouraging us to look at it,' Tan Sri Francis Yeoh, managing director of YTL, said in an interview last Friday in Singapore.
YTL expects to reach an agreement on the railway in two years, he said.
Press reports early this year said Malaysian officials were reviewing a plan to build a fast train connecting Kuala Lumpur and Singapore, which was first proposed in 1996.
Proponents of the rail link - which would cut travel time to two hours from the current six - said it could replace air travel as the main transport mode for businessmen and tourists and free the congested rail system in Malaysia for the movement of cargo to ports.
But Malaysian government officials then had said it would first need the backing of the Singapore Government, because the plan would require the acquisition of land in Singapore for laying new tracks.
'The traffic between the two countries is huge, so if you talk about the dollars and cents, there's a viable business to be done,' said Mr Scott Lim, fund manager with CMS Dresdner Asset Management. 'It's just whether there's a political will to make that happen.'
A political spat between Malaysian Prime Minister Abdullah Ahmad Badawi and his predecessor, Tun Dr Mahathir Mohamad, may hamper efforts to build the rail link, said Mr David Cohen, an economist at Action Economics in Singapore.
Malaysia in April decided to end talks for a new bridge linking the two countries to prevent both sides from becoming embroiled in endless political bickering and legal disputes.
Tun Dr Mahathir has criticised his successor for the decision, saying Malaysia had the legal right to build the bridge and scrapping the plan has cost the country billions of ringgit.
'It's a little tricky with the Causeway and the extra political wrangling in Kuala Lumpur, and how these would play into that,' Mr Cohen said. 'It just makes it a little more complicated and I wouldn't look for any quick resolution.'
Tan Sri Yeoh, 51, said he is optimistic because of the economic links between the two countries. He also plans to draw so-called cornerstone investors from both countries to take a larger stake in the project, including Singapore Airlines and Malaysia Airlines, as well as the two cities' airports, which he says should not see this as a threat.
'I'm sure there's demand for it,' said Mr Gerald Ambrose, a fund manager at Aberdeen Asset Management. YTL's 57km express rail from the airport to the Malaysian capital 'is extremely efficient, and everybody would be happier getting a fast link from Kuala Lumpur to Singapore' .
YTL, which owns the railway from the KL airport to the city, plans to take the rail unit public to raise between RM6 billion and RM8 billion (S$2.6 billion to S$3.5 billion) to fund the project if it gets the concession for the line to Singapore