No more KL-SG high speed rail, M'sia to compensate S'pore S$100 million

The project was already shelved for more than two years.

Joshua Lee | January 01, 2021, 09:06 AM

The Kuala Lumpur – Singapore High Speed Rail (HSR) is no more.

Both Singapore and Malaysia announced via a joint statement that Malaysia had proposed several changes to the HSR project in light of the Covid-19 pandemic. Despite several discussions, both countries were unable to reach an agreement.

This is the statement issued from the Prime Minister's Office:

The Government of Malaysia and the Government of Singapore wish to provide an update on the Kuala Lumpur-Singapore HSR Project in view of the expiry of the suspension period of the HSR Project on 31 December 2020.

In light of the impact of COVID-19 pandemic on the Malaysian economy, the Government of Malaysia had proposed several changes to the HSR Project. Both Governments had conducted several discussions with regard to these changes and had not been able to reach an agreement. Therefore, the HSR Agreement had lapsed on 31 December 2020.

Both countries will abide by their respective obligations, and will now proceed with the necessary actions, resulting from this termination of the HSR Agreement.

Both countries remain committed to maintain good bilateral relations, and cooperate closely in various fields, including strengthening the connectivity between the two countries.

Malaysia is now liable for compensation, according to the KL-SG HSR Bilateral Agreement (BA) signed by both countries in 2016, according to a statement by the Ministry of Transport:

"Malaysia has since allowed the HSR BA to be terminated, and has to compensate Singapore for costs already incurred by Singapore in fulfilling its obligations under the HSR BA in accordance with the Parties’ agreement.

Our relationship with Malaysia is deep and multi-faceted, and we look forward to continued good relations and close cooperation with Malaysia for the mutual benefit of the people of both countries"

Malaysian media recently reported that the amount to be compensated to Singapore is around RM300 million (S$100 million).

Project suspended twice

Originally mooted in the 1990s, the project was repeatedly shelved due to cost issues.

Then, at the 2013 Singapore-Malaysia Leaders' Retreat, former Malaysian Prime Minister Najib Razak and Singapore's Prime Minister Lee Hsien Loong formally agreed to build a High Speed Rail link between Kuala Lumpur and Singapore.

It was going to be a game changer, allowing travellers to zip between Singapore and Kuala Lumpur within 90 minutes.

Both countries signed the Kuala Lumpur – Singapore High Speed Rail Bilateral Agreement in December 2016.

In 2018, Mahathir Mohamad, who became the country's seventh prime minister after his Pakatan Harapan coalition won the May general election, requested the suspension of the HSR project, citing high construction costs.

In September that year, both countries agreed to suspend the HSR project until May 2020.

Malaysia subsequently reimbursed Singapore S$15 million in abortive costs for putting the project on hold.

New government, another suspension

Mahathir resigned in February 2020 amid a political crisis. His successor, Muhyiddin Yassin, proposed changes to the HSR project and requested to extend the suspension to December 31, 2020 in order to discuss said changes.

"During the suspension period, Malaysia has proposed some changes to the HSR Project, and we have been discussing them in good faith with Malaysia," said Singapore's Ministry of Transport on November 26, 2020.

Earlier this month, Malaysian media reported that the Malaysian government intended to go ahead with the HSR project without Singapore, and pay up around RM300 million (about S$100 million) as compensation for terminating the HSR Bilateral Agreement.

Top image: Artist impression of KL-SG HSR, SG HSR.