Reasonable speeds are possible on Cape Gauge if track and equpiment are well-maintained. In the 1980s South Africa had the Metroblitz electric trainset running regularly at 160 kph, and a number of steam-hauled services at up to 120 kph. However the cheap original construction of many of these narrow gauge lines meant that they were often built with curves and gradients which militated against high speed running, and with bridges, foundations and earthworks which would not be able to handle the stresses of high speeds and heavy loads, so the gauge itself was not the only limiting factor. Whether a purpose-built modern high speed line could be designed for narrow gauge is a moot point, but if you're building a brand new line to modern standards then you might as well build standard gauge for many of the reasons already stated in this thread, most notably the availability of off-the-shelf equipment.
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Queensland rail tilt trains also run at 160 km/hr on 1064 mm gauge
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The only train trips I regret are the ones I didn't take.
The only train trips I regret are the ones I didn't take.