Singapore incurred S$270m in HSR costs; removal of assets company was 'main concern'

SINGAPORE has incurred more than S$270 million in costs, to date, for the recently-terminated Kuala Lumpur-Singapore High Speed Rail (HSR) project, Minister for Transport Ong Ye Kung said in Parliament on Monday.

The project was terminated on Jan 1 after both countries failed to reach an agreement on several changes proposed by Malaysia by the Dec 31 deadline.

One major sticking point was the proposed removal of the assets company that would have been the system supplier and network operator of the service (see amendment note), said Mr Ong.

Responding to Workers' Party Member of Parliament for Sengkang Louis Chua, Mr Ong said that costs incurred so far included abortive costs for consultancy services, design of infrastructure and manpower required.

Singapore has already received some S$15 million from Malaysia, arising from the latter's request to suspend the project in 2018.

The compensation amount and the schedule for payment are both specified in the legal agreements, said Mr Ong. However, due to confidentiality obligations, Singapore cannot reveal the exact terms of compensation for termination of the HSR project, he added.

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He noted that the compensation will not include land acquisition costs, since the value of the land can be recovered. There is also a small component of miscellaneous abortive costs that Singapore is currently verifying, he said.

Among the changes proposed by Malaysia was the removal of the assets company. But to Singapore, the assets company was to be the centrepiece of the HSR project, and was necessary to ensure the interests of both countries were protected, said Mr Ong.

Singapore thus informed Malaysia that the removal of the assets company "constituted a fundamental departure from the HSR bilateral agreement".

Amendment note: An earlier version of this article referred to the assets company as being responsible for rolling stock and rail assets. The Ministry of Transport has clarified that the assets company would not have been responsible for rolling stock. The article has been amended accordingly.