THE transport minister, on July 13, stated that firms who interested in reviving the high-speed rail (HSR) project will be allowed access to the project-related reports.
In addition, MyHSR Corp Sdn Bhd, the government arm responsible for the development and implementation of the Kuala Lumpur-Singapore HSR ((KL-SG-HSR) project, says it is no longer something we can ignore.
Its chief executive officer, Datuk Mohd Nur Ismal Mohamed Kamal, feels we need the project "for our long-term survival, as neighbouring countries around us have narrowed the competitiveness gap between us and them".
He spoke of the projects in Thailand, the Eastern Economic Corridor Development Plan and the Jakarta-Bandung HSR line.
The HSR structure, according to Mohd Nur Ismal, facilitates a greener environment given its lower carbon output which may be vital to attracting quality investments.
We may now look at the possibility of the KL-SG-HSR becoming a reality soon.
The public-private finance initiative which is being proposed for the KL-SG-HSR is commonly referred to as a private-public-partnership (PPP). While oft used, we need to examine the concepts of such a partnership in detail.
It is a deal between the public and private sectors to deliver a project or service traditionally provided by the public sector.
A PPP is a contractual agreement between the private sector and public services that allows for greater private participation in the delivery of projects.
In transportation projects, usually, the private sector participation will focus on additional project risks such as design, construction, finance, long-term operation and traffic revenue.
This is an ideal scenario as expertise and finance are readily available in the private sector businesses and investors.
An example is the Build America Bureau in the development and delivery of transportation improvements, where they found that the early involvement of the private sector can bring about innovation, efficiency and capital to address complex transportation problems facing the state and local governments.
This may be a good model for us to follow in the HSR Project.
The design of the path of the rail line, the land acquisition matters that will be vital for the progress of the project and the development surrounding the various stations that the rail line will stop at will be efficiently managed by the private sector participants.
There are other advantages to the adoption of such a partnership in that the management skills and financial standing of the private businesses could create better value for money for taxpayers.
A PPP is known to increase the quality, efficiency and competitiveness of public services.
Budgetary restrictions may cause a project to fail, but under a PPP, the limited public sector capacities will be replenished as additional finances may be available through investors.
The efficiency of the private sector operational methods can increase quality to the public and the ability to speed up development.
In this regard, state-owned enterprises and public sector companies should not be allowed to bid for PPP projects.
The PPP model is meant for leveraging the managerial and operational efficiency of the private sector.
What then ought to be the first step of moving towards a PPP in the HSR project? There should be a model concession agreement with focus on the relevant provisions enshrined in the Federal Constitution.
The private sector should be protected against abrupt changes in government, economic or policy environments.
In this regard, the government is encouraged to develop a PPP law with an endorsement from Parliament as this will create confidence for investors and also players in the private sector.
The law will also provide a framework to implementation with a responsibility to the legislature and regulatory agencies.
Currently, we have PPP guidelines but guidelines do not have the force or compliance measures of a legislative enactment.
The impact of a legislative enactment will go a long way in attracting private companies in the country as well as investors from outside.
This may be a dream coming to fruition in the near future for more connectivity between Malaysia and her neighbours.
The writer is former Associate Professor & Research Fellow, Faculty of Law, Universiti Malaya and Arbitrator & Mediator, Advocate & Solicitor, High Court of Malaya (Non-practising)
The views expressed in this article are the author's own and do not necessarily reflect those of the New Straits Times