December 20, 2017 5:03 pm JST

Singapore and Malaysia open bidding for historic railway link

Chinese and Japanese contractors are on a collision course

MAYUKO TANI, Nikkei staff writer

Commuters walk to a train station in Singapore's financial district: The new line will connect the city with Kuala Lumpur in 90 minutes. © Reuters

SINGAPORE -- Bidding for a high-speed railway project connecting Singapore and Kuala Lumpur kicked off on Wednesday, in what is shaping up to be an intense battle between Chinese and Japanese contractors.

This will be Southeast Asia's first cross-border high-speed line, and the entire project is expected to cost around 60 billion ringgit ($14.7 billion).

MyHSR Corp. of Malaysia and SG HSR of Singapore -- both government-owned entities set up to lead the project -- announced the tender in a joint news release. The bidding window runs until June 29, and the winner is to be chosen by the end of 2018. 

The goal is to launch the line by the end of 2026.

The tender, open to domestic and international players, seeks an "assets company" to handle design, construction, financing, operations and maintenance -- including track work, power, signaling and telecommunications. The winner will also be responsible for designing, building, financing and maintaining the rolling stock.

The organizers promised an "open, fair and transparent procurement process" in the news release, saying proposals will be evaluated based on "the technical solution, commercial robustness, financial sustainability and price."

China and Japan, in particular, are expected to bid aggressively, as both aspire to export their infrastructure expertise to Southeast Asia and beyond. A Japanese consortium including trading giant Sumitomo, East Japan Railway (JR East) and Hitachi is promoting the country's proven track record of safely operating bullet trains. A Chinese consortium led by state-owned China Railway Corp. (CRC), meanwhile, is focusing on price competitiveness and China's achievement in building the world's longest train route.

A South Korean consortium, including Hyundai group companies, has also expressed interest in participating, as have European players such as France's Alstom.

The project, proposed by Singapore's and Malaysia's prime ministers, is a major milestone for bilateral cooperation. Once the train is up and running, it will link the cities in 90 minutes -- presenting a convenient option compared with a roughly five-hour drive, or the hassle of catching a 40-minute flight.

The line is to have eight stations, including Bandar Malaysia in Kuala Lumpur and Jurong East in Singapore.

Sumitomo Corp.

Japan

Market(Ticker): TKS(8053)
Sector:
Industry:
Distribution Services
Wholesale Distributors
Market cap(USD): 21,940.79M
Shares: 1,250.60M

East Japan Railway Co.

Japan

Market(Ticker): TKS(9020)
Sector:
Industry:
Transportation
Railroads
Market cap(USD): 39,825.67M
Shares: 385.65M

Hitachi Ltd.

Japan

Market(Ticker): TKS(6501)
Sector:
Industry:
Producer Manufacturing
Industrial Conglomerates
Market cap(USD): 40,756.88M
Shares: 4,833.46M

HYUNDAI Corp.

South Korea

Market(Ticker): KRX(011760)
Sector:
Industry:
Distribution Services
Wholesale Distributors
Market cap(USD): 246.36M
Shares: 13.22M

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