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Japan, China, South Korea compete over Kuala Lumpur-Singapore high-speed rail project

By Yoichiro Ohashi

 

The competition between Japan, China, and South Korea is heating up over winning the Kuala Lumpur-Singapore high-speed rail project. A marketing war has broken out among the firms eager to satisfy South East Asia’s ravenous appetite for infrastructure development.

 

Public relations

 

In February, an diorama exhibition of a model Shinkansen running on a track attracted many shoppers at an Isetan Mitsukoshi department store branch in Kuala Lumpur.

 

Tomy and JR East co-sponsored the exhibit. “Railroads are not common in Malaysia, so we wanted to offer a fun way to learn about Shinkansen,” says an Isetan Mitsukoshi representative.

 

The group of private Japanese firms who hope to win the high-speed rail project include JR East, Sumitomo, Mitsubishi, Hitachi, and Mitsubishi Heavy Industries. The consortium highlights the safety and advanced technology of the Japanese system that boasts zero fatalities.

 

Japan’s rivals are also working to impress the residents of Kuala Lumpur. China Railway, the national railway operator, has been exhibiting driving simulators and train seats near a train station located in a bustling shopping district since January. In a South Korean shopping mall, an immersive “4D” train ride experience is drawing large crowds, with vibrating seats that are synchronized to 3D images projected on train windows.

 

“Judging from the exhibits, the South Korean one seemed good but I think the contract will ultimately be decided by price,” says business owner Mr. Mafou (36 years old), who visited both the Chinese and Korean booths.

 

Motives

 

In its report published in late February, the Asian Development Bank estimated that the infrastructure demand in the Asia-Pacific region could exceed 26.2 trillion dollars (about 3,000 trillion yen) by 2030. Securing adequate road and rail access has been a challenge for Southeast Asia, and the Kuala Lumpur-Singapore high-speed rail project is only one example among many. The budget for the project is said to be more than 50 billion ringgit (about 1.3 trillion yen).

 

As a part of China’s Silk Road economic block concept, the People’s Republic is actively developing a high-speed railway connecting Kunming City, Yunnan Province, Laos, Thailand, Malaysia and Singapore. According to a Malaysian newspaper, a Chinese company did a debt-ridden Malaysian government-affiliated investment firm a favor in the form of a bailout. “It is important for China, economically and militarily, to have a railway going south from Kunming,” explains a diplomatic source, “it will act as an alternative access route in case problems arise in the South China Sea.”

 

This is a bid Japan cannot afford to lose, as infrastructure exports are one of its main growth strategies. In fall of 2015, Japan lost the bid for Indonesia’s Jakarta – Bandung high-speed rail project to China after enjoying the advantage at first. However, China’s reputation has been on the decline due to construction schedule delays as a result of China’s reluctance to fund the project. If Japan can successfully win the bid for the Kuala Lumpur-Singapore project, it could regain its global presence. Once the bidding details are disclosed, the competition will be further heightened if European nations such as Germany and France decide to participate.

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