HSR construction suspended till May 2020, M'sia to reimburse S'pore S$15 million in abortive costs

In the spirit of bilateral cooperation.

Sulaiman Daud | September 05, 2018, 04:51 PM

On Sept. 5, Singapore and Malaysia signed an official agreement to suspend the Kuala Lumpur-Singapore High Speed Rail (HSR) project.

Signing in Putrajaya

The signing and exchange of legal documents was conducted in Putrajaya, Malaysia, by Malaysia's Economic Affairs Minister Azmin Ali and Singapore's Transport Minister Khaw Boon Wan.

Malaysia's Prime Minister Mahathir Mohamad and Deputy Prime Minister Wan Azizah Wan Ismail, as well as Singapore's Deputy Prime Minister Teo Chee Hean witnessed the ceremony.

Malaysia's Foreign Affairs Minister Saifuddin Abdullah, Singapore's Minister for Foreign Affairs Vivian Balakrishnan and Senior Minister of State for Communications and Information Sim Ann were also present.

Details of the deal

According to a joint statement from Singapore and Malaysia, from our Ministry of Transport (MOT), the deal includes the following points:

  • Both countries remain committed to the HSR.
  • At Malaysia's request, Singapore has agreed to suspend the construction of the HSR Project up to 31 May 2020.
  • Malaysia will bear the agreed costs in suspending the HSR.
  • If by 31 May 2020, Malaysia does not proceed with the HSR Project, Malaysia will also bear the agreed costs incurred by Singapore in fulfilling the HSR Bilateral Agreement.

While the joint statement does not specify the amount of the agreed abortive costs for the HSR suspension, Channel NewsAsia have reported that it will be S$15 million.

At a joint press conference, Azmin said that Malaysia will pay compensation if it cancels the HSR project.

The HSR Express Service between Singapore and Kuala Lumpur is therefore expected to commence by January 1, 2031, instead of the original date of December 31, 2026.

Also, the international joint tender for the HSR Assets Company will be called off by Singapore and Malaysia's infrastructure companies due to the length of the suspension.


Singapore & Malaysia ministers respond

Said Minister Khaw following the signing ceremony:

"Many Singaporeans had been looking forward to the realisation of this project and we remain committed to this project."

However, he also said that he understood why Malaysia had to suspend the HSR.

On his part, Azmin had this to say after the signing:

"We have all worked tirelessly in order to bring about a resolution that is mutually beneficial.

Without doubt, this agreement would not have happened if not for our strong commitment to bilateral cooperation between our two countries.

I am confident that this spirit will see us through the final fruition of the Kuala-Lumpur Singapore High-Speed Rail project."

No compensation, but costs for suspension

This echoes his tweet on Aug. 30, which said that both countries were inching closer to a "win-win deal".

However, on Sept. 3, Azmin told the Malaysian media that Malaysia would not need to pay "compensation" to Singapore and that the HSR was suspended for an unspecified period of time.

The Malaysian Minister appeared to jump the gun on his comments to the media.

Azmin made no mention then that Malaysia would have to reimburse Singapore for abortive costs related to the suspension of the project.

He had previously had to retract a statement he made to the media in relation to his HSR talks with Singapore.

In the joint statement today, Khaw explained the suspension of the HSR would cause it to be further postponed three to four years due to technical considerations and Singaporeans would expect to see an express service closer to 2031.

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Top image from Azmin Ali's Twitter page.