Calls for government to reveal compensation cost of cancelled HSR project increase

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Transparency International has called on the government to reveal the amount wasted on the now-cancelled High-Speed Rail (HSR) project to Singapore to build trust and transparency within the rakyat and the government.

TI president Muhammad Mohan said this money was on top of the estimated RM300-odd million in compensation that has to be paid to Singapore.

It will all be taxpayers’ money, so the rakyat have the right to know, he said.

“At least on the Malaysian side of the project, the government should reveal the details of the cost so far.

“They are using taxpayers’ money, after all, to pay the compensation,” he told FMT.

This follows an earlier statement by Minister in the Prime Minister’s Department (Economy) Datuk Seri Mustapa Mohamed who said the global Covid-19 pandemic, which has battered economies around the world, had made the original conditions of the bilateral agreement HSR project no longer competitive for Malaysia.

The emergence of the pandemic had forced the government to find ways to reduce the cost for several mega projects, including the now-cancelled HSR project that was supposed to link Kuala Lumpur and Singapore via high-speed rail line.


In a lengthy posting, Mustapa today took to his Facebook to explain the changes proposed by Malaysia to the project, and the reasons that led to the cancellation of the multi-billion-ringgit development – the termination of which was announced a day after the agreement between both nations lapsed on Dec 31 last year.

The HSR project has been suspended since May 2018 for renegotiations and it was reported that both governments were unable to reach an agreement over changes proposed by Malaysia as of Dec 31, last year, the end of its extended suspension period.

Mustapa said this was despite intense negotiations carried out in the last six months at the ministerial and technical level, as well as a video conference between Prime Minister Tan Sri Muhyiddin Yassin and Singapore Prime Minister Lee Hsien Loong.

“As an individual directly involved with the two-way negotiations since six months ago, I wish to stress that we have done our best to protect the nation’s interest.

“However, I would like to share with all of you that the bilateral discussions went on in a friendly and constructive matter,” the Jeli MP said.

Previously, a government source had told FMT that Malaysia would have to pay Singapore some RM320 million in compensation, although former prime minister Datuk Seri Najib Razak said this could rise to RM1 billion, given how much Singapore had spent on the project.

Mustapa also elaborated on the proposed amendments to the HSR project which Malaysia and Singapore could not agree to.

This, he said, included an HSR model used in Europe, the UK, Japan and South Korea, a new project structure that would provide flexibility in funding the project, and other changes.

Cynthia Gabriel, the founding director of Centre to Combat Corruption and Cronyism (C4), also said the government had to be transparent.

“It’s taxpayers’ money. They are not dealing with their grandfather’s (money),” she told FMT.

She said the “unelected government” must rise above all else and prove to the rakyat that it can be open and accountable.

“If this practice of secrecy continues, we are headed for a more opaque and potential deep corruption,” said Gabriel.

Carmelo Ferlito, Senior Fellow at the Institute for Democracy and Economic Affairs (IDEAS), however, said the government may be bound by its secrecy clause.

“If this clause is indeed in place, there is not much the government can do,” he told FMT.

However, Ferlito said that for the sake of transparency, the clause should have been eventually contested earlier by the government.

Mustapa had earlier also mentioned that a confidentiality clause did not allow Putrajaya to reveal how much it is compensating Singapore for the cancellation of the transboundary high-speed rail project.

“Although I want to share the details (of the compensation incurred by Malaysia), I am unable to do so since the amount has yet to be determined.

“However, I want to stress that the compensation is not punitive in nature, but to pay for the cost that has been incurred by Singapore for the project.


“At the moment, we are waiting for the details on the cost incurred by Singapore, which I will look into and verify. All the claims (in relation to the compensation) have been jointly agreed (by Malaysia and Singapore).

Former transport minister Anthony Loke was also among those who urged Putrajaya to be transparent and disclose how much it is costing to pay off its project partner to terminate the contract.

In a statement, Loke said the government must make the monetary details public like the Pakatan Harapan government did when it was negotiating with Singapore over the terms for delaying the HSR and RTS projects.

“The government must be transparent and announce to the people how much must be paid to Singapore, and what is the total spent by the MyHSR company, which has been shouldered by taxpayers since 2016,” he said.

Malaysia and Singapore on January 1 announced they have terminated the contract to build the HSR, which could have linked the two countries, after failing to reach agreement on proposed changes to the project.

Muhyiddin and Lee issued a joint statement announcing the scrapping of the deal upon the expiry of the project suspension period the day before.

Mustapa also addressed speculations that the Kuala Lumpur-Singapore HSR project would be replaced with a high-speed rail initiative linking Kuala Lumpur and Johor Baru.

“The government will be conducting a detailed review to determine our next direction. Any talk on a high-speed-rail project linking Kuala Lumpur and Johor Baru is just speculation,” he added.

Related report:

Jan 2, Najib: PN govt wants to pay “crony” private company annually after HSR contract termination