By Selangor Journal Staff
SHAH ALAM: Malaysia are not required to compensate Singapore with whopping RM500 million penalty as the Kuala Lumpur-Singapore High Speed Rail (HSR) project is put on hold, indefinitely.
In confirming the matter, Economic Affairs Minister Mohamed Azmin Ali today said that the matter was agreed upon during a meeting with Singapore last week.
He said the conclusion was made after much consideration from both sides while taking into account on Malaysia’s current financial situation.
“After a series of discussions, Singapore has agreed to accept the Malaysian government’s view to postpone the project to a future date, because by then, we are certain the country’s economy would have healed.
“No compensation needs to be paid during this period, and any such payment is only required if at the end of the deferral period, we cancel the project,” he told reporters at Selangor Legislative Assembly sitting sidelines.
Yesterday, it was reported in The Edge Markets that the RM500 million penalty will not be applied to Malaysia, citing an anonymous source.
It was also reported that the 350km line will be deferred for two years, until May 31, 2020.
Malaysia under the previous Barisan Nasional (BN) administration in Dec 2016, had signed the HSR bilateral agreement with Singapore.
Shortly after taking over the government in May 2018, Pakatan Harapan coalition lead by Prime Minister Dr Mahathir Mohamad had expressed its desires to scrap the project.
Mahathir then changed his tune when he said that the project might be postponed and not cancelled, as Malaysia could not afford the compensation due to Singapore if the project was scrapped.
Azmin in August announced that the project cost was estimated to be at RM110 billion, along with other newly discovered ‘hidden costs’.
He said the amount varies significantly in compared to the previous estimation of between RM54 billion and RM74 billion as announced by the BN administration.
