Industry Trend Analysis - Tendering, Politics Favour China and Japan for Singapore-KL High-Speed Rail - FEB 2018

BMI View: We reiterate our view that China or Japan will be the primary beneficiaries of the planned Singapore-Kuala Lumpur High-Speed Railway. The project ' s structure requires a fully-integrated approach that few groups of companies apart from Chinese and Japanese firms can provide, while the respective governments of Japan and China are also driven by political incentives to support the project.

As ongoing preparations are being made for the Singapore-Kuala Lumpur High-Speed Railway, we reiterate our longstanding view that Chinese or Japanese companies are the best-positioned to win the main contract for the 350km project ( see ' KL-SG High Speed Rail: China Or Japan Most Likely Winner ' , June 2 2016). The structure of the primary assets company ("AssetsCo") tender jointly released by Singapore's Land Transport Authority (LTA) and Malaysia's Land Public Transport Commission (SPAD) covers nearly all physical aspects of the project - including tracks, signalling and rolling stock - which will likely compel bidders to form large consortia. Apart from Chinese and Japanese companies, we have identified European and South Korean companies as the only other potential bidders that could form competitive proposals. In December 2017, companies from China and Japan announced their separate intentions to bid for the estimated USD20bn project, confirming our earlier expectation; other potential bidders have until June 2018 to submit their bids.

Tender Structure Requires Integrated Approach

A Faster Link
Malaysia - Planned and Existing Railways
Source: News Sources, Land Public Transport Commission, BMI

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