Financing the high-speed rail linking Singapore and Kuala Lumpur will be a complex undertaking, say experts. In addition to construction and design costs, the Republic and Malaysia will both have to decide what funding model to use, reported The Straits Times. They will also need to contend with the risk of delays due to design changes and cost overruns.

The project will require significant investment in land, stations, tracks, power and permits, among other things, said Associate Professor Willie Tan, Head of the department of building at the National University of Singapore's School of Design and Environment.

Land acquisition is also a major issue and could be a potential cause of delay, he added.

The two governments have a range of financing options to consider, Prof. Tan said. The project could be fully funded by both governments - the traditional approach where the government develops and owns the system.

The project could also be financed with a mix of public and private funds, with the governments buying part ownership of a project company. The private sector would retain some ownership and derive some income. "For the private sector to provide funding for the project, it will have to be comfortable with the risk allocation between the government and the private sector, and the financial viability of the project," said Mr. Oliver Redrup, Associate Director for transport at PwC Singapore.

Fares would need to be worked out as the purchasing power of Malaysians would differ substantially from that of Singaporeans, said Mr. Fang Li Wei, infrastructure and capital projects leader at Deloitte South-east Asia. "The fares would need to be fair to both sides so as to ensure the required ridership, to break even operationally and to pay for the loans," he said.