EY scores Malaysia-to-Singapore high-speed rail contract

04 July 2019 Consultancy.asia

The Malaysia-to-Singapore high-speed rail project developers MyHSR have selected Ernst & Young as one of its two latest new advisors.

MyHSR, the Malaysian body overseeing the high-speed rail project connecting Kuala Lumpur with Singapore, has appointed a new TAC and a CAC – that is, a Technical Advisory Consultant and a Commercial Advisory Consultant, with global professional services firm Ernst & Young assigned to fulfil the latter role following a recent open tender call. Minconsult, Malaysia, has meanwhile been granted the parallel TAC role for the project.

According to statement by MyHSR, the developers will now coordinate with EY on the commercial aspects of the project such as with respect to developing new business models, identifying funding and financing options, and updating ridership and economic forecasts, while Minconsult will be tasked with reviewing and validating the proposed design changes to the alignment, stations and train maintenance facilities on the Malaysian section of the route.

“The appointment of TAC and CAC is a major step in the effort to develop an affordable Kuala Lumpur – Singapore high-speed line,” said MyHSR CEO Mohd Nur Ismal Bin Mohamed Kamal. “The solution will be a holistic one, it will respect the needs of the government of Singapore, cognizant of the market expectation of the project sustainability and bankability, and without compromising on service reliability, journey time and safety.”

Kuala Lumpur - Singapore high-speed rail project

With both firms charged with finding cost-cutting avenues to completion, their appointments have come after the Singapore and Malaysian governments mutually agreed toward the end of last year to suspend construction on the project until May of 2020. Since then, MyHSR, owned by the Malaysian Ministry of Finance, has put out the two open consultancy tenders with a view to completing its review by year's end.

Open to submissions since May, MyHSR said at the time of the call that the CAC would be required to develop a new business model that will produce the optimal project life-cycle cost, as well as update the benefits assessment that the project will bring to the country. “With the appointments of both the TAC and the CAC, a comprehensive project review exercise will be completed, and a report will then be prepared and submitted to the government,” said the MyHSR boss.

Suspended due to national debt concerns, the KL-SG HSR – previously slated for completion by 2026 – was established as a joint strategic government initiative aimed at enhancing business and social links between the two countries, with the line’s Express Service expected to cut the commute time between capitals to just 90 minutes. Environmental consultancy ERE Consulting of Malaysia has been one of a number of project’s advisories to date.

“There are significant economic benefits to enhance public transport connectivity between both countries. However, (the) projects have to be feasible and sustainable,” Malaysian Prime Minister Tun Mahathir Mohamad said recently, with his Singapore counterpart Lee Hsien Loong stating in response; “We look forward to receiving the proposals from Malaysia soon, in order to work together with them and find a way forward that will work for both countries.”