Malaysia can honour KL-Singapore HSR obligations following project's cancellation: Minister
02 January, 2021
Malaysia will honour it is obligations beneath the Bilateral Agreement for the cancelled High-Quickness Rail (HSR) job, Minister in the Prime Minister's Department Mustapa Mohamed said on Friday (Jan 1).
The Singapore and Malaysian governments had on Friday announced the termination of the HSR project following a lapse of their agreement on Dec 31, 2020.
“By virtue of the Bilateral Agreement and previously agreed conditions, Malaysia will honour its obligations under the Bilateral Contract. Both countries will initiate the required to look for the amount of compensation.”
He said that the COVID-19 pandemic had severely impacted the Malaysian economy, and that the conditions of the Bilateral Arrangement signed found in 2016 were no more viable for Malaysia given the current economic situation.
“Since late 2018, the federal government has explored several alternatives to reduce the expense of the Kuala Lumpur-Singapore Superior Speed Rail (HSR) job. This has are more urgent with the onset of the COVID-19 pandemic.”
Mr Mustapa added that since mid-2020, the federal government of Malaysia had proposed some changes to the task, including the task structure, alignment and station design.
The initial project structure, he said, would have required substantial and long-term government guarantees.
“The new project structure is likely to provide the Government the flexibility in financing options, such as deferred payments, public-private partnerships and the opportunity of accessing financing at favourable rates,” he said.
"More importantly, the proposed changes to the job structure could have allowed us to leverage on the HSR task to accelerate Malaysia’s monetary recovery content the COVID-19 pandemic, by bringing forward the start of the construction stage by almost two years."
He added that both governments had conducted numerous discussions on their respective positions with the previously mentioned changes in mind.
"However, we had not been capable to come quickly to an agreement on these changes," he said.
On Friday, Singapore Prime Minister Lee Hsien Loong and Malaysian Primary Minister Muhyiddin Yassin announced that the task would be discontinued following the HSR Bilateral Arrangement lapsed on Dec 31, 2020.
Mr Mustapa added: "Moving forward, the federal government will undertake a detailed research to explore all possible options, including the viability of a domestic HSR job and its advantages to Malaysians."
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