Malaysia finally broke its code of silence yesterday, July 18, with Economic Affairs Minister Azmin Ali saying that the Kuala Lumpur-Singapore High-Speed Rail (HSR) could still push through.
Today, Malaysian Prime Minister Tun Dr Mahathir Mohamad announced that Malaysia would look into the deferment of the HSR project.
Dr Mahathir said that due to Malaysia’s financial difficulties, and after reviewing the HSR contract, “we will have to do it at a later date or we may have to reduce the price”.
He said, referring to Putrajaya’s RM1 trillion (S$336 billion) debt, “at the moment when we look at the financial situation of the country, we thought that we couldn’t go ahead with that”.
“The problem is that if we just unilaterally discard the agreement, we have to pay a very high compensation”, Dr Mahathir continued, speaking to reporters.
“But the reduction of the price, I think it is very difficult as far as we can make out, so it will have to be deferred.”
However, the HSR project still remains with much uncertainty, without an official reply from Malaysia since the diplomatic note Singapore sent on June 1 seeking clarification on its position on the HSR project.
Yesterday, Malaysian economic minister Azmin Ali also said that Putrajaya’s estimated RM110 billion cost for the HSR project includes expenses and items not disclosed by the previous administration.
Mr Azmin also said that Malaysia would be renegotiating the components involved in the inflated costs of the HSR project.
“Everything. We will look and revisit all the terms and conditions in the agreement. Everything. The entire project needs to be reviewed,” he said.
Malaysia has also moved away from talks of cancelling the HSR project, as Mr Azmin added, “PM has made it very clear today that it’s not about cancelling the project. We need to review the entire project.”
However, there could be stormy weathers ahead, with Malaysia looking to reduce costs of the HSR, yet with Singapore continuing to incur cost on the project, with expenditure expected to hit about S$300 million by the end of the year.
“The priority is quite clear. We want to reduce the debt that we are facing now. So maybe if the project is viable at a later stage then we can discuss. But our priority now one is to cut cost and reduce government debt”, he said.
Many Singaporeans expressed their scepticism at Malaysia’s remarks.
Malaysia’s position remains to be seen, as both Malaysia and the Republic have agreed to a meeting to discuss the project. The Malaysian Government has informed the Singapore Government that it will communicate the proposed dates of the meeting by July 31.