(Bloomberg) -- Malaysia’s king is planning to seek funding from Chinese investors for a multibillion dollar high-speed rail project between the Southeast Asian country and Singapore, according to people familiar with the matter.
Sultan Ibrahim Iskandar is looking for investment from a Chinese state-owned company, the people said, asking not to be identified because the information is private. President Xi Jinping, whose Belt and Road Initiative has fueled an infrastructure boom across Asia and Africa, invited the monarch for a four-day state visit to deepen strategic ties that began Thursday.
“Malaysia has gone through various governments, but I am here as king of the country,” Sultan Ibrahim said to Xi at their meeting Friday. “Malaysia’s foreign policy has always been in favor of strong partnership with China.”
Sultan Ibrahim’s delegation includes representatives of YTL Corp., the people said. The Malaysian company is part of one of the three groups shortlisted for the project, the Edge Malaysia reported in March. YTL Executive Chairman Francis Yeoh told Bloomberg TV in November that it’s interested, while stopping short of confirming its participation in the bidding process.
A spokesperson for YTL denied that members of the company were part of the delegation and said it had nothing to do with seeking funding.
The king has been a longtime backer of the rail link, which Prime Minister Anwar Ibrahim’s government revived last year with a caveat that it won’t be funded by taxpayers. Sultan Ibrahim told Singapore’s Straits Times newspaper in December that a private consortium could fund it and operate it for 30 years to recoup expenses before handing it back to the Malaysian government.
Malaysia’s National Palace and the Transport Ministry didn’t immediately respond to a request for comment. In a statement on Sept. 18, Malaysia’s Ministry of Foreign Affairs said the visit symbolizes the robust state of the two countries’ relations.
China supports mutually beneficial cooperation between enterprises in accordance with commercial principles, its Ministry of Foreign Affairs said in a statement sent to Bloomberg News, adding it understands the project is still in the preliminary research phase.
Sultan Ibrahim became Malaysia’s king in January under the country’s unique rotating monarchy where nine hereditary rulers take turns to serve five-year terms. He rules the southernmost state of Johor, which borders Singapore.
Malaysia’s monarch plays a mostly ceremonial role, though the royal rulers have become increasingly important in determining who holds power in the country amid a rapid turnover of leaders in recent years. The country’s Transport Minister Anthony Loke is part of the delegation. Loke told Bloomberg News in July that the cabinet will decide on the project’s viability by the end of this year.
Seven local and international groups comprising 31 firms submitted proposals, MyHSR Corporation Sdn., a Malaysian government agency overseeing the project, said in January, without naming them. The bidders were whittled down to a shortlist of three, the Edge Malaysia said in its report in March. They are a group including the construction arm of YTL, one involving tycoon Vincent Tan’s Berjaya Land Bhd., and a Chinese consortium headed by state-owned China Railway Construction Corp., the newspaper said.
Loke confirmed there’s a shortlist of three in the interview with Bloomberg in July, while declining to name the groups. He said the government’s policy is to have the project led by a consortium that’s at least 51% Malaysian owned.
In the interview with the Straits Times, Sultan Ibrahim said the high-speed rail project should be aligned so that the border crossing is through Forest City, a property development in Johor. It’s operated by a joint venture between troubled Chinese developer Country Garden Holdings Co. and a Malaysian firm owned by Sultan Ibrahim, a Johor state government agency and others.
The rail line — which aims to cut travel time between the two cities to 90 minutes from more than four hours by car — was projected to cost as much as 100 billion ringgit ($23.8 billion) as a government-funded project.
Former Prime Minister Mahathir Mohamad postponed the project in 2018, about eight years after it was first proposed, citing high costs. It was formally canceled in 2021, but Anwar’s administration revived it last year on condition it’s not funded by taxpayers.
For the project to go ahead, Singapore would also need to approve it. Prime Minister Lawrence Wong said in June he’s willing to hear fresh proposals on the rail link.
China has been open to Malaysia’s push to develop railway links. During a visit to Malaysia in June, Premier Li Qiang said China was willing to back the country on development of major infrastructure.
--With assistance from Jing Li, Ram Anand, Yasufumi Saito, Colum Murphy and Li Liu.
(Updates with China Ministry of Foreign Affairs comment in eighth paragraph)
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