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Can These Companies Benefit From The Singapore-Malaysia High-Speed Rail Project?

Progress has finally been made.

After the project was first made known in 2013, the Prime Ministers of Singapore and Malaysia witnessed the signing of a Memorandum of Understanding last week for the eventual construction of a High Speed Rail that will connect Singapore and Malaysia’s Kuala Lumpur.

The project, which has a target completion date of 2026, can cut travelling time between the two cities to just 90 minutes.

The High Speed Rail is one of the largest infrastructure projects the two countries have attempted over the past decades.

In Singapore, the government has allocated a piece of land in Jurong East (the site of the former Jurong Country Club) for construction of the rail terminal.

Here are some Singapore-listed companies that may be well-positioned to benefit from the High Speed Rail project.

The material companies

Regardless of who ends up developing the project’s facilities and buildings, basic building materials need to be sourced.

This is where companies such as Pan-United Corporation Ltd (SGX: P52) and Hong Leong Asia Ltd (SGX: H22) may win big if they are chosen as key suppliers for the High Speed Rail project. Both companies supply basic building materials (such as cement and concrete) and are important suppliers to many of the development projects here in Singapore.

The building companies

The rail terminal in Singapore would be part of a mixed-used development. So, we would no doubt see many local contractors bidding for a part of the project.

Larger construction companies in Singapore such as Lian Beng Group Ltd (SGX: L03) and Chip Eng Seng Corporation Ltd (SGX: C29) could be those that would be aiming for the job.

Foolish Summary

But, it is worth noting that there is no confirmation on whether these companies are thinking of bidding or stand a chance to win a part of the new and exciting High Speed Rail project.

Moreover, the aforementioned companies all have other businesses. So even if they obtain a share of the pie, it might not guarantee that their business will grow.

Still, the High Speed Rail project would be an interesting space to watch for investors.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Stanley Lim doesn’t own shares in any companies mentioned.