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Korea Rebuilds Consortium For KL-S’pore Rail Deal

SINGAPORE: South Korea is rebuilding its team for the multibillion dollar Malaysia-Singapore high-speed rail (HSR) project in a bid to win the lead role in an international tender to be held in the fourth quarter of this year.

The move came after the Land Transport Authority (LTA) of Singapore and MyHSR of Malaysia jointly hosted an industry briefing on the progress of the rail project in early July.

The two Southeast Asian nations signed a binding contract in December 2016 to develop a 350km rail link between Kuala Lumpur and Singapore scheduled to be completed by 2026.

“We are trying to rebuild our consortium for the high-speed rail project to best meet the requirements by both of Singaporean and Malaysian governments,” Park Min-woo, assistant minister for the Ministry of Land, Infrastructure and Transport told The Korea Times.

“Since they announced they will place emphasis on track records, we are trying to reinforce our team with more experienced firms,” he added. “In particular, we will find a foreign partner for an alliance in the area of ‘signaling’ because there are no domestic firms with proven track records.”
The briefing was aimed at encouraging firms to form consortia to participate in the tender for the assets company (AssetsCo), which will be responsible for designing, building, financing and maintaining all rolling stock and rail assets, such as track-work, power, signaling and telecommunications.
“Following the industry briefing, we will be calling the AssetsCo tender by the end of this year, and we look forward to receiving quality bids from various consortia,”
By  LTA chief executive Ngien Hoon Ping.
In a joint statement, the two governments said that the tender will prioritize several features, such as safety and security, proven technology, operations flexibility and value for money as procurement objectives.

For a successful bid, South Korea is now reviewing highlights from the industry briefing and seeking ways to reinforce its public-private joint consortium. 

“We are reviewing all possible options to realign our consortium to better compete against China and Japan,” an executive from the Korea Rail Network Authority (KRNA) who attended the industry briefing said on condition of anonymity.

“Nothing has yet to be decided but it is likely to be finalized in the coming weeks.”

The KRNA is spearheading the realignment by teaming up with Korea Railroad Corp. (KORAIL) and large Korean companies, such as Hyundai Rotem for locomotives, and KT for telecommunication for network construction.
Confident but lack of support
The bidding race for the rail project estimated to cost around $15 billion is likely to be keenly competitive. Almost 400 participants from 165 organizations, including rolling stock and system suppliers, engineering and legal consultants, as well as operators and construction companies, showed up at the briefing. 

There were 21 entities from Asia, 67 from Europe, 17 from America, 25 from Singapore, 29 from Malaysia, and others.  Although Japan and China are jostling for the mega deal, Korea remains confident that it can win the HSR project expected to cut travel time between Singapore and Kuala Lumpur to 90 minutes. 

“At first we felt that we were way behind China and Japan because of a lack of government support and weak financing capability,” said a Singapore-based official from a Korean construction company asking not to be named.

“But now we believe that we can give it a try as our key strength, an ability to transfer technology and grant its resale right, could give us a competitive edge,” he added.

According to the Korean government, unlike other countries, Korea is able to transfer most of its key technologies and knowhow because the public sector has secured them through a state-led R&D project. However, some participants in the consortium are voicing concerns that the nation’s bidding attempt may lose momentum unless President Moon Jae-in drums up his support for the deal.

“What is most worrisome is that President Moon and Cheong Wa Dae have yet to provide concrete support for the project,” said the KRNA executive.

“It was one of the key overseas projects under former President Park Geun-hye,” he added. “However, since she was ousted from office, Cheong Wa Dae has not seemed to have great interest in it.”

The project is considered particularly important for Korea because it can pave the way for the country to lay the groundwork in the burgeoning Southeast Asian infrastructure market.
Source by: 
Epeak World News
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