The KL-Singapore high-speed rail link is poised to usher in immense economic multiplier effects in both countries during and after the completion of the transportation link, say analysts.
While the direct beneficiary is the construction and materials industry, the project is set to bring indirect economic benefits including a boom in tourism, services, property, enhanced business partnership links and job creation.
“This high-speed rail link will accelerate the economic integration of both countries which is necessary to compete in the increasingly globalised world today.
“While the obvious benefit is the big cut in travel time, other less noticeable gains are the wealth creation effects it will have on the people in both cities,” RAM Holdings' group chief economist Dr Yeah Kim Leng told The Star.
He said it would create additional jobs in both countries besides boosting businesses that have close links in both countries.
“The additional time saved from travelling means one can opt to work in KL and stay in Singapore or vice-versa,” Yeah added.
He said it was an economically viable project and the bulk of the cost such as land acquisition could be slashed if the governments play a bigger role in supporting it.
Maybank Investment Bank's chief economist Suhaimi Ilias said the economic multiplier effects would be apparent in the construction, financial, transport and tourism sectors.
MIDF Research's chief economist Anthony Dass said the rail link was a positive economic catalyst that could contribute up to 1.5% to 2% in today's economic terms to Malaysia's total GDP growth when it is linked to the pan Asian high-speed rail network.
Hong Leong Investment Bank's construction analyst Jarod Soon, meanwhile, said based on rough initial calculations, the 330km high-speed rail could cost around RM30bil, excluding cost of rolling stocks.
However, Soon said the final cost would largely be determined by land acquisition and other factors including alignment and terrain.