By Syauqi Jamil
PUTRAJAYA: Malaysia and Singapore have finally reached an official conclusion on suspending Kuala Lumpur-Singapore High Speed Rail (HSR) project until May 31, 2020.
Economic Affairs Minister Mohamed Azmin Ali today said that Malaysia will bear the cost for deferring the project by paying S$15 million (RM45 million) as an abortive costs to Singapore, by Jan 2019.
“Both parties have agreed that the abortive cost that needs to be paid by the Malaysian government is about SGD15 million. That needs to be paid before Jan 2019. We still have some space,” he said.
Malaysia will also require to bear the agreed cost incurred by Singapore should it not proceed with the HSR project by May 31, 2020 in fulfilling the HSR bilateral agreement.
It was explained that postponing the project will require a change in the business model, where an escalation of the project cost will incur, on top of maintaining confidence in investors.
Earlier today, Singapore Coordinating Minister for Infrastructure and Minister for Transport Khaw Boon Wan and Azmin had exchanged legal documents to vary the HSR Bilateral Agreement based on the new understanding.
The event was witnessed by Prime Minister Dr Mahathir Mohamad, Deputy Prime Minister Dr Wan Azizah Wan Ismail and Singapore Deputy Prime Minister and Coordinating Minister for National Security Teo Chee Hean.
Speaking at a joint press conference with Singapore here, Azmin said that such agreement could not have been possible without the spirit of bilateral cooperation from both nations.
He said this can be seen from the series of discussions between Malaysia and Singapore that went on for weeks, despite.
“When I first met minister Khaw in Singapore, in Aug 11, I presented the mandate of the Malaysian cabinet, that we would like to postpone the project between 3 to 4 years based on the economic conditions in Malaysia. I’m glad that Khaw and his team viewed our position positively.
“A week later, we met in KL. Khaw came back with the position that Singapore was willing to consider postponing HSR for a period of a year.
“Of course, I needed to discuss with the Cabinet then had to went back to appeal for them to consider for a longer period of time,” he said.
The 350km HSR Express Service is expected to commence for public use by Jan 1, 2032 instead of the original commencement date of Dec 31, 2026.
Azmin in August announced that the project cost was estimated to be at RM110 billion, along with other newly discovered ‘hidden costs’ which was not announced by the previous Barisan Nasional government.