Malaysia pays S$102.8m in compensation for High Speed Rail termination

THE government of Malaysia has paid Singapore S$102.8 million in compensation following the termination of the Kuala Lumpur-Singapore High Speed Rail (HSR) project, both governments said in a joint statement on Monday.

This includes reimbursement for costs incurred for the project's development, as well as payment in relation to the earlier extension of the project's suspension.

"The two countries reached an amicable agreement on the amount following a verification process by the government of Malaysia. This amount represents a full and final settlement in relation to the termination of the Bilateral Agreement," said Singapore's Minister for Transport Ong Ye Kung and Malaysia's Minister in the Prime Minister's Department (Economy) Mustapa Mohamed in the statement.

"Both countries remain committed to maintaining good relations and fostering close cooperation for the mutual benefit of the peoples of the two countries," they added.

In a Facebook post after the statement, Mr Ong said: "I am glad that we were able to close this chapter amicably, without affecting the good bilateral relations between our two countries."

"Looking ahead, there are many areas that we have opportunities to cooperate on," he added. "These include the issues Minister (for Foreign Affairs) Vivian Balakrishnan discussed with leaders in Malaysia last week, such as the restoration of some air travel, which Ministry of Transport, Singapore, will be very involved in, and also commuting via the Causeway."

The HSR project was terminated after both countries could not reach an agreement on proposed changes by the Dec 31 deadline.

In Parliament in January, Mr Ong said that a major sticking point had been Malaysia's proposal to remove the assets company that would have been responsible for providing the rolling stock and rail assets.

Singapore saw the assets company as "necessary to ensure that the interests of both countries are protected", and felt that its removal "constituted a fundamental departure from the HSR bilateral agreement and could not be accepted", he said then.

Malaysia decided to allow the agreement to be terminated, and had to compensate Singapore accordingly, he added.

Costs incurred by Singapore included abortive costs for consultancy services, design of infrastructure and manpower required, he said then; he added that the compensation would not include land acquisition costs, since the value of the land can be recovered.

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