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Business Advice

Businesses excited about growth prospects

Singapore Polytechnic's senior retail lecturer Sarah Lim predicts a 15 per cent rise in spending by Malaysian tourists once the high-speed rail link is established.
The Straits Times - February 25, 2013
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Businesses excited about growth prospects

 

BUSINESSES here are already getting excited about growth opportunities that could arise from the planned high-speed rail link between Singapore and Kuala Lumpur, even though it is seven years off.

They noted, however, that several factors will determine just how much the link boosts bilateral business prospects, such as the location of stations, the frequency of departures and ticket prices.

If the link makes the journey more convenient, home-grown restaurant chain PastaMania could more easily step up its presence in KL, said managing director Andrew Kwan.

"KL and its surrounding cities have a total population of three million to four million, so this could be the next playground for businesses, especially if our managers can meet up, coordinate and plan much quicker."

Grandwork Interior general manager Fion Ng agreed, saying if the rail link can get her managers to central KL in 90 minutes, the firm would be more aggressive in bidding for projects there.

Grandwork designs and builds shop interiors for companies such as Prada, Salvatore Ferragamo and Kinokuniya worldwide.

"Now it takes about four hours, whether you drive or fly, if you include checking in and out at the airports and travel from the KL airport to the city centre," she said. "If this can be cut down to 90 minutes, we could bid for more projects and send staff over to support the KL team more easily and quickly."

Mr Malcolm Chao, vice-president of franchise operations at German restaurant chain Brotzeit, echoed her sentiments.

He said that the rail could open growth opportunities for the firm not only in KL, but also in cities along the rail link's route.

"If the rail has stops, say, in Malacca, that would certainly bring in more traffic," he noted.

A spokesman for Maybank Singapore said the bank would likely switch from planes to rail "as we can be more effective in time management on the assumption of good infrastructure like efficient facilities, carparks and regular scheduled trips".

Ms Koh Ching Ching, the head of group corporate communications at OCBC Bank, added: "Having another mode of transport linking the cities will be a good alternative, which can potentially reduce travelling time and costs."

Credit Suisse economist Michael Wan said overall, the rail link should boost business ties.

"Some businesses in Singapore which face cost pressures might see this as an opportunity to shift to Malaysia, and that would ease some of our infrastructure and land supply constraints," he said.

Others, however, were more sceptical.

Some bankers who spoke to The Straits Times said if the KL terminal is on the city outskirts, like its budget airport terminal, the rail link would not be a significant improvement over existing transport options.

"If the start and end points are too inconvenient, it could end up like Shanghai's high-speed railway, which is now dubbed a white elephant," said one.

Cerebos Pacific chief financial officer Ramlee Buang said the governments of Singapore and Malaysia should also look into whether the rail can be powered by clean, renewable energy and whether the ecological impact of construction could be minimised.

The news of the rail link was also a downer for airline stocks in Singapore.

Analysts said the move could cut demand for air tickets by as much as 50 per cent.

Singapore Airlines dipped seven cents to $10.88, while Tiger Airways closed half a cent lower at 74.5 cents.

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