Malaysian minister says compensation amount to Singapore for HSR is confidential

Petaling Jaya—In a Facebook post on Monday morning, January 4, Minister in the Malaysian Prime Minister’s Department, Mustapa Mohamed, said that the amount Malaysia needs to compensate Singapore for the cancellation of the High-Speed Rail (HSR) project cannot be disclosed due to both countries being “bound by a secrecy clause.”

Mr Mustapa clarified that the final amount has not yet been finalized. He added that the amount Malaysia is to pay Singapore is “not punitive, but it is to pay back the specific cost of the project Singapore has spent.”

Furthermore, he added, “Our side is waiting for the details of that cost from Singapore, and once received, it will be researched before confirmed. The types of claims that are allowed have been agreed together.”

However, while a bilateral agreement containing a confidentiality clause forbids that the total cost for compensation be made public, Mr Mustapa said that he and the team would discuss with Singapore an agreement to share the information once the final cost is determined. But for now, a figure stated “by either party is mere speculation,” he added.

In his post, the minister explained the reason behind the cancellation of the Kuala Lumpur-Singapore HSR project agreement, even as it had long been agreed that HSR projects would boost the “trade, tourism and socioeconomic activities for both countries, while increasing relations and enabling Malaysia to become an innovative-based economy.”

The project had been inspired by the success of HSR initiatives in other countries, including the Tokyo-Osaka Shinkansen and Taipei-Kaohsiung HSR, and would even help reduce carbon emissions as well as the number of vehicles on Malaysia’s streets.

Mr Mustapa also acknowledged that the project had been delayed after the turnover of power after Malaysia’s General Election in May 2018.

But the project, as well as many others, was affected by the COVID-19 pandemic.

“The emergence of COVID-19 has forced the Government to find ways to reduce the cost of several mega projects as well as identify strategies to restore the country’s economy post COVID-19,” he wrote.

And while the two countries negotiated for a time, a new agreement could not be reached. On Jan 1, 2021, it was announced that the HSR project had been cancelled after the bilateral agreement lapsed.

Mr Mustapa’s post ended with him mentioning the possibility of another HSR project, “Will the KL-Singapore speed train project be replaced with KL-JB speed train project?

The government will implement a detailed study to determine the next direction. Currently, any speculation about KL-JB speed train project is just speculation.”

Online news portal Free Malaysia Today said on Jan 4 that a government source had given the figure of RM320 million (S$105.5 million) as compensation to Singapore, but that according to former Prime minister Najib Razak, this amount  could rise to RM1 billion (S$330 million), based on what the project had cost Singapore. -/TISG

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