Estimated RM110b HSR price tag includes hidden costs: Azmin


Malaysian minister asked by Najib to explain basis for sum

Malaysia's Economic Affairs Minister Mohamed Azmin Ali said yesterday that his government's estimated RM110 billion (S$37 billion) price tag for the Kuala Lumpur-Singapore High Speed Rail (HSR) project includes hidden costs not revealed by the previous administration.

"There were hidden costs that the previous government did not disclose to the public. So the Pakatan Harapan (PH) government is disclosing the entire cost of the project," he told Parliament.

"We need to ascertain whether the government can afford this project under the current economic situation," he said, adding that the project was too costly as the country faced a national debt of RM1 trillion.

Datuk Seri Azmin was replying to questions by former prime minister Najib Razak and former minister Wee Ka Siong over how the PH government had arrived at the RM110 billion figure.

The previous administration under Barisan Nasional, which was defeated in the May 9 general election, had said the HSR project would cost about RM72 billion.

Soon after the election, Prime Minister Mahathir Mohamad said he would scrap the project, but later said it was merely postponed.


I am not saying it is a terrible project. The best solution is for both parties to sit down and discuss what is in our best interests. I do not want to exclude the possibility (that the HSR is still on).

DATUK SERI MOHAMED AZMIN ALI, Malaysia's Economic Affairs Minister.

Finance Minister Lim Guan Eng told The Straits Times in a recent interview that the government has received offers to halve the cost of the project, showing that the current cost of the project's Malaysian segment was exorbitant.

Najib, who retained his Pekan seat in the May 9 general election, also questioned the basis for the RM110 billion price tag, saying that the international tender will close on Dec 28, and therefore the cost of the project is not yet known.

"We don't even know how much the project will cost us, and if it is an international tender, it will be very competitive. How can the minister state that the cost is RM110 billion when the tender has not closed yet?" said Najib.

He noted that a large section of the population supported the HSR because of its economic spin-offs, and asked Mr Azmin how many jobs would be lost if it is cancelled.

Mr Azmin replied that the costing was done by his ministry and the Finance Ministry, and maintained that "it was just costing" for now. "Of course in any tender processes, there will be some savings. This is why from the beginning, Pakatan Harapan has always asked for all projects to be done via open tender," he said.

Malaysia and Singapore had signed the legally binding bilateral agreement on the 350km-long rail line in December 2016. The agreement also provides for how compensation is to be dealt with should the project be terminated.

Singapore's Coordinating Minister for Infrastructure and Minister for Transport Khaw Boon Wan told Parliament earlier this month that Singapore had dispatched a diplomatic note to Malaysia on June 1 to seek clarification on Kuala Lumpur's stance on the HSR project, but had yet to get a reply.

Singapore said it has so far incurred $250 million in costs on the project, with a further $40 million needed by the end of the year.

Mr Azmin told Parliament, in response to a question on the HSR from opposition leader and Umno president Ahmad Zahid Hamidi, that he will lead a delegation to Singapore for talks, and he had conveyed his intention to meet to Mr Khaw in their telephone call on June 6.

"The HSR agreement allows either side to cancel the project, subject to the terms of the contract. I wish to emphasise that any agreement must be fair and just to both parties," said Mr Azmin .

"I will lead a delegation to Singapore soon to hold talks to reach an agreement with the Singapore Government for a fair solution, as well as maintain the diplomatic ties that have long been established between Malaysia and Singapore."

"The Attorney-General has given the opinion that this matter must be settled according to the law as well as bilateral talks. Based on the Attorney-General's advice, we are studying all options available," Mr Azmin added.

He did not give a date for the planned meeting, but later told reporters he had proposed it be held before the end of this month.

He also did not rule out the possibility of Malaysia proceeding with the project, saying: "I am not saying it is a terrible project. The best solution is for both parties to sit down and discuss what is in our best interests. I do not want to exclude the possibility."

In a Facebook post yesterday evening, Najib again called on the government to reveal the basis for its estimated cost.

"Why does the PH government not disclose the economic impact of the HSR project?" he said.

"This impacts millions of people, hundreds of thousands of jobs, international relations and the future of Malaysia's economy."

A version of this article appeared in the print edition of The Straits Times on July 19, 2018, with the headline 'Estimated RM110b HSR price tag includes hidden costs: Azmin'. Print Edition | Subscribe