KUALA LUMPUR - Malaysia's Economic Affairs Minister Mohamed Azmin Ali on Monday (Sept 3) said an agreement has been reached with Singapore to postpone the High-Speed Rail (HSR) project to a future date without any compensation, and that the project would resume once the deferral ends.

A Singapore Ministry of Transport spokesman, responding to the remarks, said: "Malaysia and Singapore are currently in discussions on Malaysia's request to defer the Kuala Lumpur-Singapore High Speed Rail Project. We hope to reach a mutually acceptable outcome soon".

Datuk Seri Azmin had told reporters earlier that the consensus with his Singapore counterpart was reached last week after a series of meetings, and that an official agreement would be signed in the near future in Kuala Lumpur.

He said that during this period, both governments would hold more talks on ways to reduce the cost of the multi-billion-ringgit project.

"After several discussions, the Singapore government has agreed to accept the views of the Malaysian government to defer the project for a period where we are confident that the Malaysian economy would improve by then," Mr Azmin told reporters on the sidelines of the Selangor state assembly's opening session.

"There'll be no compensation to be paid during this deferment period and it has to be paid only if we cancel this project at the end of the deferment period," he added.

Mr Azmin said the project delay timeline would be announced only at a later date, with the deferment period already agreed by both sides.

"We want to continue this project because it gives economic benefit to both countries and the people. But in that period of postponement, we will discuss how to lower the project cost," the minister said.

Quoting sources, The Edge business publication said the 350km line will be deferred for two years, until May 31, 2020.

Last Thursday (Aug 30), Singapore's Minister for Transport Khaw Boon Wan wrote on Facebook that he had met Mr Azmin Ali and they were "brainstorming ideas on how to further our bilateral relationship".

"We should be able to announce our joint decisions on RTS and HSR soon," added Mr Khaw, who is also Coordinating Minister for Infrastructure, referring to the Johor Baru-Singapore Rapid Transit System.

Malaysia had initially wanted to scrap the project, with the Pakatan Harapan (PH) government reviewing the country's mega projects after taking over power in May. However, a cancellation would mean a RM500 million (S$166 million) in penalties.

Mr Khaw revealed in Parliament in July that Singapore had already spent more than $250 million on the HSR project, and is likely to expend another $40 million by the end of the year.

The PH government had said the country, with debts surpassing RM1 trillion, could not afford to build the HSR. The finance ministry said the actual cost for the HSR would hit RM110 billion, far higher than the previous government's price tag of roughly RM70 billion.