Khaw: S'pore has already spent over $250m on HSR project

TRANSPORT MINISTER KHAW BOON WAN
TRANSPORT MINISTER KHAW BOON WAN

Another $40m will be spent by year-end; a significant sum will be wasted if project does not proceed

Singapore has already spent more than $250 million on the Kuala Lumpur-Singapore High-Speed Rail (HSR) project, and is likely to expend another $40 million or so by year-end, Transport Minister Khaw Boon Wan revealed in Parliament yesterday.

Replying to questions from several MPs on the status of the HSR, Mr Khaw said that based on preliminary estimates, the costs incurred had "already exceeded $250 million".

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

Mr Khaw said the expenditure included land acquisition, setting up of an infrastructure company - SG HSR Pte Ltd - and the formation of a team of more than 100 specialists in the company "to build, own, fund and maintain the HSR civil infrastructure in Singapore".

And by May, SG HSR had called five tenders to construct civil infrastructure within Singapore.

Mr Khaw, who is also Coordinating Minister for Infrastructure, said the bilateral agreement with Malaysia "provides for how compensation is to be dealt with" should either side decide not to proceed.

He added that Singapore sent a diplomatic note to Malaysia on June 1 "to seek immediate clarification on Malaysia's position".

BIG WASTE OF TAXPAYERS' MONEY

This is actual money that has already been spent, our taxpayers' money... a significant amount which has been spent will be completely wasted expenditure if the project does not proceed.

TRANSPORT MINISTER KHAW BOON WAN, on the costs incurred related to the Kuala Lumpur-Singapore High-Speed Rail project.

"To date, Singapore has still not received a reply from the Malaysian Government," he said, adding that public statements made by Prime Minister Mahathir Mohamad and other Malaysian ministers - through various press interviews - on the termination of the project "have not been followed through with any official communication".

Mr Khaw said: "At this point, therefore, we have been left with no choice but to continue performing in accordance with the bilateral agreement, and thus continue to incur more costs."

Last month, Singapore incurred more than $6 million; and it expects to incur another $6 million this month.

"These costs will increase rapidly with time," Mr Khaw said. "From August to end-December 2018, we will need to spend at least $40 million more."

He said: "Because the costs that we have incurred will add to the total amount of compensation, it is in Malaysia's own interest to officially inform us of its position on the HSR project early, to minimise the amounts involved."

Mr Khaw said he highlighted this to Malaysian Economic Affairs Minister Azmin Ali "when he called me on June 6". Singapore's High Commissioner to Malaysia Vanu Gopala Menon has also "conveyed the same points" to Malaysian Transport Minister Anthony Loke and Finance Minister Lim Guan Eng.

"However, we have yet to receive the details from Malaysia," he noted.

Earlier, Foreign Minister Vivian Balakrishnan told the House that should Malaysia cause the HSR project to be terminated, Singapore will deal with the question of compensation for costs incurred, in accordance with the binding agreement signed with Malaysia and international law.

"The Singapore Government has a duty to safeguard public funds by recovering these costs," he said.

Asked for his views, urban transport expert Park Byung Joon, an associate professor at the Singapore University of Social Sciences' school of business, said there was little choice for Singapore except to proceed with the project until Malaysia sends an official cancellation note.

"We can hold off awarding further contracts, but suspending all work is not as easy as it sounds," Dr Park said. "You would need to start from scratch if the eventual decision was to proceed. That would be costly. A lot of companies have also spent a lot of effort on their bids already."

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A version of this article appeared in the print edition of The Straits Times on July 10, 2018, with the headline 'Khaw: S'pore has already spent over $250m on HSR project'. Print Edition | Subscribe