Kuala Lumpur, 7 January 2021 – IDEAS echoes the calls for greater transparency from the government in disclosing the various issues of the High-Speed Rail (HSR), particularly on the full justification of the government’s proposal for the removal of AssetCo from the initial project structure as well as the costs already borne by Malaysia for the project. Conflicting messages from the Singaporean and Malaysian governments on the reasons behind the termination have led to investor uncertainty and further erosion of public trust in infrastructure governance.
“We are encouraged that the government has aimed to achieve better value for money by deciding to defer the HSR project to a later date and review its current project structure, business model, infrastructure and system design”, comments Tricia Yeoh, CEO of IDEAS. “However, Malaysia’s decision to remove AssetCo from the project structure needs to be fully justified to the public. Singapore’s Transport Minister Ong Ye Kung revealed to his Parliament on 4 January that this was the primary reason an agreement could not be reached. The government needs to state how its alternative solution would be an improved version from the AssetCo. In presenting its alternative, it needs to also ensure that contractor appointments should be transparent and competitive”, she adds.
The shortfalls of the HSR project should be the catalyst towards much-needed reforms in infrastructure planning and governance of infrastructure development. In the past few years, Malaysia has had turbulent experience with mega projects like the ECRL, Melaka Gateway, MPP-TSGP and many others. While the change of government and COVID-19 pandemic may contribute to this turbulence, these cases also reveal an underlying problem of the current system of infrastructure management.
What the HSR and other infrastructure projects highlight are that transparency is a key component of effective infrastructure governance. In the case of HSR, there was limited information available related to how the government aimed to achieve better value for money after the project’s postponement in 2018. The disclosure of basic information such as the project structure and financial agreement between governments is necessary for independent evaluation over the project’s feasibility. Public transparency is also crucial in promoting public accountability and ensuring the efficient use of public funds.
These projects also demonstrate the need for a more systematic method of planning and selection of projects based on their economic needs and those which have the highest payback for their costs. This should be done by an independent body in order to effectively achieve strategic planning of the country’s infrastructure needs. This also ensures that infrastructure projects achieve a balance between affordability and fiscal sustainability while providing crucial infrastructure.
Finally, the change of governments twice within less than two years has inevitably impacted upon our country’s infrastructure development. Malaysia requires more stable systems of infrastructure management that involve greater parliamentary oversight and public scrutiny. The newly minted Dewan Rakyat Special Select Committee on Infrastructure Development should play an active role in the initiation, implementation and monitoring of the country’s public infrastructure projects. Additional checks and balances through parliamentary debates would also strengthen the transparency and stability of projects moving forward.
“The HSR is largely a story of how politics and the pandemic can interfere in what could have been a unique infrastructure development cooperation between Malaysia and Singapore. We need to ensure stability in future projects by including greater parliamentary and public scrutiny in the decision-making process of large infrastructure projects”, adds Tricia Yeoh.