Chitchat Malaysia and China and the High Speed Rail

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An honorable member of the Coffee Shop Has Just Posted the Following:

This article began circling yesterday after the signing of the HSR MOU. In a nutshell
- China rail group together with a Malaysian partner bought the land where the HSR terminal will be and they will building the terminal
- Together with CRRC Sifang(our hairline crack trains manufacturer) will submit the bid to build the HSR
- CRRC Sifang has already built a rolling stock manufacturing plant in Malaysia
- The land sale to China Rail helped reduce 1MDB debt burden as well as Najib's burden
- China also bought the powers stations from 1MDB

Guess who is likely to win the bid and why the whole thing about sending the train back to China was so secretive.

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EM SQUARED March 9, 2016 12:39 pm
China takes the lead in Malaysian mega-projects
Hafiz Noor Shams


Japanese and other foreign bidders being edged out as Beijing gets close to Kuala Lumpur
©Bloomberg
Tadashi Maeda was visibly agitated. Addressing an investment forum in Kuala Lumpur, the senior managing director at Japan Bank for International Cooperation assured the packed hall that Japan would redouble its efforts to secure a contract to build the proposed 350km high-speed railway to link the Malaysian capital to Singapore, at an estimated cost of between $9.7bn and $14.5bn.

Maeda had good reason to be agitated. He was speaking last October, a month after the Indonesian government surprised many by awarding a $5.5bn, 150km Jakarta to Bandung high-speed railway contract not to Japan — which had spent five years on feasibility studies and pushing Jakarta to get the project going — but to China. It shocked the Japanese establishment , which had been certain of success.
Mr Maeda should brace himself again. FT Confidential Research, a unit of the Financial Times, believes China is the early favourite to win the Malaysian contract, too.
Japan was the favoured development partner for Malaysia under former premier Mahathir Mohamad in the 1980s and the 1990s. But under Najib Razak, prime minister since 2009, China has moved to the fore.

Over the past five years, China-based companies have successfully participated in high-profile infrastructure projects. The $1.1bn Second Penang Bridge — partly financed by an $800m loan from the Chinese government — was built by the state-owned China Harbour Engineering Company (CHEC) together with Malaysia-based UEM Group.
More significantly, in the rail sector about 80 per cent of Malaysian rolling stocks are Chinese made. The Malaysian rail business is so lucrative that China Railway Rolling Stock Corporation (CRRC) opened a $97m rolling stock manufacturing plant in the country in July 2015.

CRRC is part of the Chinese consortium led by freight transporter China Railway bidding for the Kuala Lumpur-Singapore line. The party also includes China Railway Signals & Communication and China Communications Construction (the parent company of CHEC).
China’s cause may have been helped by its support for 1MDB, the controversial state investment fund at the centre of corruption allegations bedevilling Mr Najib. The prime minister and 1MDB deny any wrongdoing over $680m that landed in his personal bank accounts from a mysterious foreign source.
China to the fore in Malaysian infrastructure projects

Project Main foreign contractor Country of origin Cost, $bn Completion
KL-Singapore high-speed rail To be determined TBD 9.7-14.5 2023
Gemas-Johor Bahru electric double-track rail China Railway Construction Corporation China 2 2020
KL118 Tower Samsung C&T Corporation S Korea 0.5 2019
2,000MW 3B coal-fired power plant Mitsui Japan 2.7 2019
944MW Murum Dam Three Gorges Development Company China 1 2015
Second Penang Bridge China Harbour Engineering Company China 1.1 2014
Seremban-Gemas electric double-track rail IRCON International India 0.9 2013
Source: FT Confidential Research

1MDB was at risk of default until China saved it in November and bought a set of power assets from the fund for $2.3bn. 1MDB also sold part of its stake in a large plot of prime land in Kuala Lumpur to China Railway Construction Corporation (CRCC), the same plot which the Najib government has designated as the Malaysian terminus of the planned high-speed line.

Mohd Azharuddin Mat Sah, head of Malaysia’s Public Land Transport Commission, denies the land sale gives China an advantage in the race. He insists Malaysia and Singapore will award the contract through an open tender to be held this year, with 2023 as the target completion date.
But the denial will be of little comfort to the Japanese consortium comprising East Japan Railway, Sumitomo, Hitachi and Mitsubishi Heavy Industries.
Hafiz Noor Shams is a researcher covering Malaysia at FT Confidential Research.


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