Malaysia to negotiate deferment of high-speed rail with Singapore

Above: An artist's impression of the Bandar Malaysia station on the high-speed rail line. Left: Malaysian Prime Minister Mahathir Mohamad attending the Parliament sitting yesterday. He said discussions on the high-speed rail project will be carried o
Malaysian Prime Minister Mahathir Mohamad attending the Parliament sitting yesterday. He said discussions on the high-speed rail project will be carried out when Economic Affairs Minister Mohamed Azmin Ali visits Singapore before the end of the month.PHOTO: BERNAMA
Above: An artist's impression of the Bandar Malaysia station on the high-speed rail line. Left: Malaysian Prime Minister Mahathir Mohamad attending the Parliament sitting yesterday. He said discussions on the high-speed rail project will be carried o
An artist's impression of the Bandar Malaysia station on the high-speed rail line.PHOTO: EDELMAN

KL wants to delay project; axing it would incur hefty compensation, says Mahathir

Malaysia will negotiate a deferment of the Singapore-Kuala Lumpur High Speed Rail (HSR) project with Singapore as it looks to avoid paying compensation, Prime Minister Mahathir Mohamad said yesterday.

"The problem is that if we just unilaterally discard the agreement, we have to pay a high compensation," Tun Dr Mahathir told reporters in Parliament.

"We cannot say that we will never build this HSR but at this moment, we don't have the funds," he said. "We need to delay."

Dr Mahathir said discussions will be carried out when Malaysia's Economic Affairs Minister Mohamed Azmin Ali visits Singapore by the end of the month.

Datuk Seri Azmin said that everything in the agreement needs to be relooked. "The entire project needs to be reviewed," he told reporters yesterday, adding that the government would consider if a supple-mentary agreement is needed.

"The priority is quite clear. We want to reduce the debt that we are facing now," he said on the sidelines of a Parliament proceeding. "Maybe if the project is viable at a later stage, then we can discuss. But our priority now is to cut cost and reduce government debt."

LACK OF FUNDS

We cannot say that we will never build this HSR but at this moment, we don't have the funds. We need to delay.

MALAYSIAN PRIME MINISTER MAHATHIR MOHAMAD

Mr Azmin's office has said the intention is to communicate with Singapore before the end of the month, but no date for a meeting has been set.

In response to media queries, a spokesman for Singapore's Ministry of Transport said yesterday: "The Malaysian government has since informed the Singapore Government that it will communicate the proposed dates to us for such discussions by July 31, 2018. We are waiting to receive these dates from Malaysia."

Malaysia's new government has revealed that the country's debt has soared to more than RM1 trillion (S$337 billion), and it intends to cut the debt by renegotiating or holding off mega projects.

The Pakatan Harapan (PH) administration has already issued a stop-work order for the East Coast Rail Link (ECRL) while it reviews the project, and has pushed down the cost of the third Light Rail Transit in the Klang Valley.

In May, Dr Mahathir said the Cabinet had agreed to scrap the HSR. However, he backtracked last month, saying the rail project will be postponed instead.

"In a way, it is postponed. At this moment, we need to re-study and, if we are short of funds, we can delay the implementation of the project or reduce the scope of project," he said during a trip to Tokyo.

 
 
 

The HSR, inked during former prime minister Najib Razak's tenure in office, would cut travel time between Singapore and Kuala Lumpur to 90 minutes, compared with more than four hours by car.

PH has said that the price tag for the project, estimated at RM110 billion, is too high.

Najib has said that the HSR cost estimate is RM72 billion, but the new government counters that there are hidden costs and interests which will inflate prices.

Singapore Transport Minister Khaw Boon Wan said earlier this month that the Republic has already spent $250 million on the project, and is likely to pour in another $40 million by the year end.

"This is actual money that has already been spent," he had said. "We can recover value for some of the expenditure... But a significant amount which has been spent will be completely wasted expenditure if the project does not proceed."

A version of this article appeared in the print edition of The Straits Times on July 20, 2018, with the headline 'Malaysia to negotiate deferment of high-speed rail with Singapore'. Print Edition | Subscribe