HSR project suspension, Malaysia to reimburse Singapore S$15 million

SINGAPORE and Malaysia have agreed to suspend construction of the Kuala Lumpur-Singapore High Speed Rail (HSR) project until May 31, 2020, with service on the advanced train line expected to begin some four years after the original commencement date.

Singapore's Coordinating Minister for Infrastructure and Minister for Transport, Khaw Boon Wan, and Malaysia's Minister of Economic Affairs Mohamed Azmin Ali on Wednesday exchanged legal documents in Putrajaya to vary the HSR bilateral agreement based on the new understanding.

The signing was witnessed by Singapore Deputy Prime Minister Teo Chee Hean, who is in Malaysia for a visit, as well as by Malaysia Prime Minister Mahathir Mohamad and Deputy Prime Minister Wan Azizah Wan Ismail.

Under the new agreement, Malaysia will reimburse Singapore S$15 million by end-Jan 2019 for suspending the HSR project, Mr Azmin said during the joint press conference in Putrajaya. This was in contrast to previous statements, where he said Malaysia would not need to compensate Singapore during the period when the HSR was on hold.

Mr Khaw revealed in Parliament in July that Singapore has already spent more than S$250 million on the HSR project, and is likely to expend another S$40 million or so by year-end.

If Malaysia does not proceed with the HSR project by May 31, 2020, it will also bear the agreed costs incurred by Singapore in fulfilling the HSR bilateral agreement, the two nations said.

With the new signing, HSR services between Singapore and Kuala Lumpur are expected to commence by Jan 1, 2031, instead of the original start date of Dec 31, 2026.

The ongoing international joint tender for the HSR Assets Company, or AssetsCo, will also be called off in light of the length of suspension.

"The ministers reaffirmed the mutual benefits of the HSR Project as it will bring both countries closer together by improving connectivity, deepening people-to-people ties and catalysing further economic cooperation," the joint statement read.