Why Japanese Companies Not Interested On Malaysia's Bullet Train Project

Japanese companies have withdrawn their bids to build the high-speed rail link between Singapore and Kuala Lumpur due to worries about the Malaysian government's lack of funding. 

According to reports from Japan, several companies expressed interest in bringing the nation's Shinkansen, or bullet train system, to the project. However, they concluded that investing would be too risky without government support. One such company is East Japan Railway.

Since it was first agreed upon by Malaysia and Singapore in 2013, the $21 billion project has encountered numerous obstacles. It was canceled in 2020 before being revived in July of last year. 

Instead of using public funds to build the latest attempt, Malaysia is hoping to finance it through private investment.

Concern over the project is increased by the Japanese companies' decision to abandon the high-speed line, especially considering that the nation has long been interested in the concept and that Keiichi Ishii, the country's former transport minister, visited officials in 2015 to propose the shinkansen system.  In addition to East Japan Railway, it was stated that during the project's original proposal, trading house Sumitomo expressed interest in supporting it.

The Japanese corporations exhibit reluctance owing to their inclination to allocate their financial resources and energies towards nations that are developing their railway networks and receiving government funding.

Besides East Japan Railway, it was reported that trading house Sumitomo had also shown interest in supporting the project during its initial proposal.

"The Japanese companies are not keen simply because they would rather invest their funds and resources in countries that are expanding their railway networks and where government funding is involved.

"Look at what the Japanese are doing in India. In India, the government bears direct responsibility for railway development, whereas in Malaysia, funding must come from private sources," source said.
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