How much it should cost to commute?It is close to what I have in mind. The unique proposition for this project is that it is the fastest way to go to Singapore. It will probably take 2 hours 15 minutes in total (travel time: 90 minutes, passport check: 30 minutes, taxi: 15 minutes) which is faster than by air (estimated total of 3 hours). As such, as a planner, I would have the flexibility to charge it almost similar, if not slightly more expensive than to that of airfare, but still make it as an attractive mode of transport.
Taking KLIA Ekspress as an example, the cost to travel with its high speed rail is RM0.61 per km:
Distance from KL Sentral to KLIA: 57km
Cost per trip: RM35
By using this cost and estimating the distance between KL to Singapore to be as 350km, a round trip (700km) would cost me around
RM430. (However, do take not that this is probably not a good comparison as the technology and cost between the two rail systems are different.)
I did a quick check on what it would cost me to travel between KL and Singapore (date chosen is next week 26/2) by air:
Airasia (Roundtrip):
RM139MAS (Economy, Roundtrip):
RM564As a planner I would have a headache. I can't compete with Airasia on pricing but probably not a problem with MAS.
As for the train, it would cost me
RM217 (KL-Singapore RM62, Singapore-KL SGD62). But then it take up to a good 7 hours for each trip, which is not what a high-speed rail competing with.
By car, it would cost me around RM100 (RM50 * 2) for toll while fuel would probably cost me RM200 (ESTIMATE only). That's total up to
RM300.In the end, I would price it between RM350 - RM400 to make it competitive and attractive. And here comes the commercial challenge.
Commercial RiskThe construction cost varies between different parties from a low of RM8bil to a high of RM30 bil. By taking an estimate of RM20bil for the total cost, how much money the high-speed rail need to generate annually to make it a profitable business proposition?
Assuming we price it at RM400 for round trip and attempted to get 3,000 daily passenger, our return would be:
Revenue = RM400 * 3,000 * 365 = RM438 mil.
Will you be satisfied with a 2.19% return per annum?
Political RiskWith subsidies and budget deficit, Najib is putting his head on the chopping board with this plan. If he is not able to secure 2/3 majority in the next GE, he might as well scrap this unprofitable plan.
Note: My assumptions above could be wrong but hopefully this could serve as a beginning of interesting discussions.
Pretty decent estimation.
Then you have the question of at RM400 per roundtrip, how much demand would you have considering you can fly all in on Airasia for half the price and MAS for slightly more?
How many passengers do the airlines take per day? Estimate a generous 30 total flights to SGP from KL on a daily basis, 200 passengers on each flight, means 6,000 daily travellers SG - KL. The total passengers could even be fewer considering we are estimating a packed flight each time but let's be generous to account for growth in passenger travel.
Thus your high-speed rail is attempting to net 50% of the total market straight off the bat just to get a 2.19% return per anum, and this is an optimistic assumption. If your calculations are overly optimistic and more passengers prefer to take the cheaper Airasia, then your ROI would be even lower, 1% or -ve territory depending on how much you borrowed from the bank!
Is this feasible? Not while Malaysian salaries are so low is my 2c.
By the way a good comparison is ERL with the Skybus to travel KL Sentral to KLIA which from reports has been losing money despite being faster and more efficient. Malaysians being low income would prefer to save RM20 (one way ticket RM30 vs RM9 via bus) or take a taxi rather than sit the train. Basically, if you are poor, you take the cheapest option possible, efficiency be damned. If you can afford it, why wouldn't you drive or fly MAS...