Parliament: Singapore spent $250m on HSR project, expects to spend another $40m by December, says Khaw

Replying to questions from several MPs on the status of the HSR, Transport Minister Khaw Boon Wan said that based on preliminary estimates, costs incurred had "already exceeded S$250 million".
Replying to questions from several MPs on the status of the HSR, Transport Minister Khaw Boon Wan said that based on preliminary estimates, costs incurred had "already exceeded S$250 million".PHOTO: GOV.SG

SINGAPORE - 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 Monday (July 9).

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 S$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.

The minister said the bilateral agreement with Malaysia "provides for how compensation is to be dealt with".

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

 
 
 
 

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

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."

In June, Singapore incurred more than $6 million; and it expects to incur another $6 million in July.

"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 added: "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 consideration to Malaysian Economic Affairs Minister Mohd Azmin Ali "when he called me on June 6".

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.

Dr Balakrishnan in his speech also stressed the importance of maintaining the sanctity of international law and agreements.