The price of the RM120 billion High-Speed Rail project that would link Kuala Lumpur and Singapore had been inflated due to “many corrupt elements”, said Economic Affairs Minister Mohamed Azmin Ali.
Nonetheless, Malaysia will be able to resume the project at a lower cost in two years, at a time Malaysia is facing fewer financial constraints, he said.
“We know the project is good and will be able to link two neighbouring countries and generate economic growth, but the problem is that the cost is too high because there are many corrupt elements that took place.
“Therefore, I negotiated with the Singapore government and I’m happy that the Singaporean government sees Pakatan Harapan as a transparent and responsible government, and they have agreed to defer the project for two years until 2020.
“Once the economic crisis is over, we will continue this project and with cost savings and restore Malaysia’s economy,” he told some 600 people at DAP’s grand finale ceramah in Kampung Baru Batu 11, Balakong, last night.
Azmin had been in charge of negotiating the fate of the HSR project with Singapore soon after Pakatan Harapan took power in May. Malaysia had wanted to scrap the project entirely but faces an RM500 million penalty if it does so.
The outcome of the negotiations was announced on Sept 5, whereby Malaysia would have to pay about RM45.1 million to defer the project until May 31, 2020. The payment has to be made by the end of January 2019.
The project was originally said to cost RM72 billion when it was mooted during the Najib administration in 2010, but the Pakatan Harapan-led government reportedly claimed that it actually cost RM120 billion, including interest.
This includes about RM55 billion capital expenditure for the core project, and about RM65 billion in government guarantees for train procurement, maintenance and train systems maintenance over 30 years.
Former minister in charge of the Economic Planning Unit, Abdul Rahman Dahlan, had criticised the deferment, saying that the delay would increase the cost due to inflation of construction cost.
Rahman also questioned the government’s spending priorities, saying that RM45 million would have been spent to build five rural primary schools or 643 housing units for the poor. – Malaysiakini