Thursday 28 Mar 2024
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KUALA LUMPUR (June 20): The upcoming tender to appoint a privately-financed assets company (AssetsCo) for the development of the Kuala Lumpur-Singapore high-speed rail (HSR) project may see up to 10 bidding consortiums, says MyHSR Corp Sdn Bhd chief executive officer Mohd Nur Ismal Mohamed Kamal.

"A consortium will have multiple companies in it depending on their respective roles," he told a media briefing today, ahead of an upcoming joint industry briefing by Malaysia and Singapore for the AssetsCo tender.

The tender is scheduled to be called in the fourth quarter of 2017.

The joint industry briefing is expected to attract more interested parties than a previous request for information in 2015, which drew 98 submissions, said MyHSR's commercial director Tonny Yeap.

"Registrations of interest so far are predominantly from East Asian companies plus Europeans," Yeap told theedgemarkets.com on the sidelines of today's media briefing.

The governments of Japan, South Korea and China have strongly lobbied for participation in the project over the past couple of years.

"It's natural as these are the countries with the high speed rail technologies," Yeap said.
 
Yeap added that the AssetsCo tender is believed to be among the largest in the world.

The AssetsCo will be responsible for designing, building, financing and maintaining the trains, tracks and communication systems, among others.

Among the roles to be taken on by the consortium are traffic control and communications systems providers, asset managers of networks and rolling stock providers.

A consortium would also be expected to have signalling providers, network operators and and financiers, MyHSR said.
 
When asked whether having a local partner in a consortium will be a requirement, Nur Ismal said the matter had not been decided by the governments of Malaysia and Singapore.

The AssetsCo will derive two revenue streams, Nur Ismal said. The first will be from leasing trains to the HSR operating companies.

While a lease rate will be set, the lease payments may vary depending on utilisation, he added.

The second revenue stream will come from the two governments via MyHSR Corp and the Singaporean Land Transport Authority (LTA).

Called availability payments, the second revenue stream will ensure the AssetsCo will have a set amount of funds to operate with annually and insulate them from passenger volume risk, Nur Ismal said.

The payments will be for the duration of the concession of between 20 and 25 years.

"This is to pay for the capex that they spend to build the systems, buy the trains and so on. It will run into the billions," said Nur Ismal.

Bidding consortiums would indicate the expected annual sum in the AssetsCo tender, Nur Ismal added.

The 350km Kuala Lumpur-Singapore HSR is expected to cut travel time between the two cities to 90 minutes. The deadline for completion is set for 2026.

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