Malaysia expects the compensation needed to be paid to Singapore for the termination of the Kuala Lumpur-Singapore High-Speed Rail (HSR) project to be much lower than the S$270 million (RM822 million) quoted by a Singapore cabinet member, said Minister in the Prime Minister’s Department (Economy) Mustapa Mohamed.
Singapore Transport Minister Ong Ye Kung had previously alleged that Singapore had spent more than S$270 million on the project, including the costs for consultancy services and manpower.
“The transport minister also said the compensation would not include land costs, and we are made to understand that the Singapore government has acquired several pieces of land to implement the project.
“Therefore, we are confident that the compensation cost will be much lower than S$270 million. Anyway, the matter has not been finalised and will be discussed soon,” he said during the Agenda Awani programme last night.
In a Facebook post, Mustapa said this morning that the compensation figure would not be disclosed due to a confidentiality clause in the bilateral agreement.
However, during the broadcast, he said he would reveal the figure as soon as it had been finalised.
In addition, Mustapa said, the government would be able to save 30% by not using the services of Asset Company (AssetCo).
It was announced previously that AssetCo was to be responsible for designing, building, financing and maintaining all rolling stock, as well as designing, building, financing, operating and maintaining all rail assets such as track work, power, signalling and telecommunications for the HSR project.
“The Malaysian government had given a 30-year guarantee to AssetCo amounting to RM60 billion, or about RM2 billion annually.
“The guarantee would mean that if the payments to AssetCo were less than RM60 billion, the government must pay by using other revenue to cover the gap. This is also a form of savings,” he said.
Mustapa said taking into account the design, stations and other things with the approach without AssetCo, the overall estimated cost savings was 30%, a large number by any account.
He added that Malaysia was still interested to continue the HSR project, which was seen as beneficial to the economy, but the current economic situation due to Covid-19 forced it to review the implementation model.
“According to a study, the benefits to the economy over 50 years would total about RM300 billion. The benefits are great, which is why we are still keen to implement the project.
“It’s only the model, or method, that we felt may not be appropriate amid the Covid-19 situation. So, we took another look,” he added.