Singapore still in talks with KL on deferring high-speed rail project

Malaysia's Economic Affairs Minister Mohamed Azmin Ali said that the governments of Malaysia and Singapore will hold more talks on ways to reduce the cost of the High-Speed Rail project. PHOTO: THE STAR/ASIA NEWS NETWORK

Malaysian Economic Affairs Minister Mohamed Azmin Ali said yesterday that an agreement has been reached to postpone the Kuala Lumpur-Singapore High-Speed Rail (HSR) project without compensation, and that the project would resume once the deferral ends.

However, a Singapore Ministry of Transport spokesman said that discussions are still ongoing.

Responding to media queries on Datuk Seri Azmin's remarks, she 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," the spokesman added.

Mr Azmin was in Singapore last week for discussions on the subject with Coordinating Minister for Infrastructure and Minister for Transport Khaw Boon Wan.

"We should be able to announce our joint decisions on RTS and HSR soon," Mr Khaw had said in a Facebook post on Aug 30, referring also to the Rapid Transit System between Johor Baru and Woodlands.

Mr Azmin had also said on Facebook after their meeting: "We are inching closer to a win-win deal on HSR, thanks to the hard work of officials from both sides."

But at the weekend, business publication The Edge reported that both countries had struck an accord to defer the HSR project, with the agreement expected to be formally announced this week.

The compromise, reached "in a spirit of good neighbourliness", will see Malaysia being spared having to pay a RM500 million (S$166 million) penalty for postponing the project, the publication reported in its issue yesterday, citing sources.

According to The Edge, the 350km line will be deferred for two years, until May 31, 2020.

Yesterday, Mr Azmin told reporters the consensus with his Singapore counterpart was reached last week after a series of meetings, and an official agreement would be signed soon in Kuala Lumpur.

"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 at the opening of Selangor's state assembly.

"There will 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 agreed to 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," he said.

Malaysian Prime Minister Mahathir Mohamad initially wanted to scrap the project after his Pakatan Harapan government won the May election, as part of a review of mega projects to reduce debts.

But he later said KL would negotiate a delay, as a cancellation would entail a high amount of compensation under the HSR agreement both countries had signed.

MyHSR Corp, the firm managing the rail project, had initially projected land acquisition for the HSR would have been completed in the second half of this year. However, land purchases have been put off.

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A version of this article appeared in the print edition of The Straits Times on September 04, 2018, with the headline Singapore still in talks with KL on deferring high-speed rail project. Subscribe