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M’sia minister expects compensation paid to S’pore for HSR project to be much lower than S$270 million

Mustapa Mohamed said that they were currently awaiting cost details which would be scrutinised before confirmation

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Kuala Lumpur – Minister in the Prime Minister’s Department (Economy) Mustapa Mohamed is confident that the compensation to be paid to Singapore for the termination of the Kuala Lumpur – Singapore High Speed Rail (HSR) will be much lower than the stated S$270 million.

In an airing of the Malaysian programme Agenda AWANI on Monday (Jan 4), Mr Mustapa referred to remarks made by Singapore Transport Minister Ong Ye Kung regarding costings on the HSR project.

Mr Ong had said in Parliament that Singapore spent more than S$270 million on the project, which included consultancy services and manpower costs.

However, “the transport minister also said the compensation would not include land costs, and we are made to understand that the Singapore government has acquired several pieces of land to implement the project,” said Mr Mustapa in a channelnewsasia.com report.

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“Therefore, we are confident that the compensation cost will be much lower than S$270 million. Anyway, the matter has not been finalised and will be discussed soon.”

Mr Mustapa also took to Facebook on Jan 4 to explain why the HSR project agreement’s cancellation was “the best solution for Malaysia.”

He noted that although HSR projects are expected to be catalysts in promoting investment, trade, tourism and socio-economic activities for both countries involved, the “Covid-19 pandemic has changed everything.”

Mr Mustapa alluded that the pandemic has created adverse impacts on the economy, forcing the Malaysian government to reevaluate the HSR project.

“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 noted that the compensation is “not punitive in nature” and is an amount to be reimbursed by Malaysia for specific costs of the project already paid for by Singapore.

“We are waiting for the cost details from Singapore and once received, it will be scrutinised before we confirm them (sic). The types of claims made have already been agreed upon,” said Mr Mustapa.

He added that the compensation amount would not be disclosed due to the confidentiality clause agreed upon by both countries under the agreement. Any amount disclosed to the public before finalisation is speculation, said Mr Mustapa.

The parties will discuss the amount of compensation after it is finalised and share the information, said Mr Mustapa. The minister assured the public during the live broadcast that the government would announce the compensation amount when finalised.

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 Prime Minister Lee Hsien Loong, entered a legally-binding bilateral agreement on the project in Putrajaya in December 2016.

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

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

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