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KL-S’pore High Speed Rail terminated after no agreement is reached by Dec 31, 2020

A Malaysian report puts the compensation sum to be paid to Singapore at around S$100 million

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Singapore — The Kuala Lumpur-Singapore High Speed Rail (HSR) project has been terminated, after both countries failed to reach an agreement by the Dec 31, 2020 deadline.

As a result, Malaysia has agreed to compensate Singapore for costs already incurred.

Prime Minister Lee Hsien Loong and his Malaysian counterpart, Mr Muhyiddin Yassin,  announced through a joint statement on Friday morning (Jan 1) that Malaysia’s government had proposed several changes to the HSR project. The changes were proposed in light of the impact of the Covid-19 pandemic on the Malaysian economy.

“Both governments had conducted several discussions with regard to these changes and had not been able to reach an agreement,” said the Prime Minister’s Office (PMO). “Therefore, the HSR agreement had lapsed on Dec 31, 2020.”

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Both countries had agreed to abide by their respective obligations and proceed with the necessary actions resulting from the termination.

The PMO noted that “both countries remain committed to maintaining good bilateral relations, and cooperate closely in various fields, including strengthening the connectivity between the two countries”.

A separate statement by the Singapore Ministry of Transport (MOT) said the HSR agreement was signed in 2016, with the construction of the project subsequently suspended, from September 2018 to 31 December 2020, at Malaysia’s request. The understanding was that the extension of the suspension period until Dec 31, 2020, would be the final extension.

It said both prime ministers had met via videoconference on Dec 2 to review the project’s status, including Malaysia’s proposals. The MOT said Malaysia has since agreed to the HSR project’s termination. It added that Malaysia “has to compensate Singapore for costs already incurred by Singapore in fulfilling its obligations under the HSR project in accordance with the parties’ agreement”.

According to a Malaysian report, the amount to be compensated to Singapore is around S$100 million (RM300 million).

Singapore’s incurred costs include consultancies to design civil infrastructure, manpower to oversee the project and land acquisition, reported straitstimes.com.

More costs were incurred when Singapore agreed to the suspension Malaysia requested for in August 2018 as contractors had to be compensated when contracts were broken.

The HSR project had entailed a 350km rail line with seven stations expected to cut travel time between Kuala Lumpur and Singapore to 90 minutes compared to the current estimated four hours by car and about five hours by air.

Malaysia and Singapore, represented by then Malaysian Prime Minister Najib Razak and Mr Lee, entered a legally-binding bilateral agreement on the project in Putrajaya in December  2016. /TISG

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