KUALA LUMPUR, May 16 — Despite the uncertainty over the future of major infrastructure projects in Malaysia following the Pakatan Harapan’s (PH) victory in the May 9 elections, projects such as the Kuala Lumpur-Singapore High-Speed Railway (HSR) is likely to move forward, according to BMI Research.

In a statement today, BMI Research said the project was politically popular and economically sound, and those already in advanced construction stages would likely proceed following minimal review by the new government.

"This is due to the fact that Singapore to Kuala Lumpur (KL) is the world’s busiest international air route.

"However, contracts and tendering processes are likely to be reviewed given that the Malaysian implementing agency, MyHSR Corporation Sdn Bhd was directly under the control of former prime minister Datuk Seri Najib Razak,” said the research house.

The research house said the real estate developments adjacent to the planned stations were also likely to undergo scrutiny. For example, the Bandar Malaysia terminal was a flagship project of 1Malaysia Development Bhd (1MDB), Najib’s state investment fund that was facing allegations of corruption.

PH’s promises to increase transparency and reduce corruption would be positive for the Malaysian construction industry’s overall business environment in the long term. However, the efforts could extend tendering and contracting processes and lead to delays.

Besides the HSR, mass transit projects in KL which include two new mass rapid transit (MRT) lines, a new LRT line, and extensions to the existing lines would also to remain intact given that both KL and the surrounding Selangor state overwhelmingly voted for the PH coalition.

Rural development projects in Sarawak and Sabah will also continue to receive attention as the Sabah state government is now allied with PH and PH-aligned parties gaining traction in Sarawak. Therefore, there would be a strong political impetus for policies favouring both regions.

On the other hand, BMI research said that political controversial projects and those with weaker business cases face rising risks that they wiould be revised, downsized or cancelled outright by the PH government.

Among projects which were at risk of cancellation was the East Coast Rail Link (ECRL), where the RM55 billion project drew extensive criticism from Opposition lawmakers in 2017 when it was awarded to the China Communications Construction Company in a closed tender.

"While there is an apparent need for better logistics links to Malaysia’s east coast, we believe that the political unpopularity of the project as it currently stands means that it will be subject to intense scrutiny leading to major revisions and a potential cancellation,” BMI Research said.

The Malaysia-China Kuantan Industrial Park (MCKIP) and the accompanying Kuantan Port would likely face intense scrutiny given the project’s ties with China and local unpopularity.

Prime Minister Tun Dr Mahathir Mohamad had previously singled out MCKIP as an example of Chinese investments encroaching on Malaysian sovereignty and had been criticized by local entrepreneurs for the lack of opportunities given to Malaysian companies.

Meanwhile, high-end real estate projects across Malaysia would likely face difficulties as the government expands anti-corruption efforts and attempts to reduce housing costs, two core concerns among PH voters.

While little can be done about already-built and nearly-complete projects such as the first phases of the 1MDB-linked Tun Razak Exchange and China-backed Forest City in Johor, potential restrictions on foreign developments and property ownership could weigh on future projects such as the Melaka Gateway and an Integrated Robotics Hub in Johor.