Datuk Seri Najib Razak claimed today the Perikatan Nasional government planned to pay annual compensation to a private company following the termination of the Kuala Lumpur-Singapore High-Speed Rail (HSR) which is widely speculated to be replaced with a local HSR line.
Najib, who did not name the company, said he was informed that the highest echelons of the government have already agreed to launch a domestic KL-Johor Baru HSR to replace the terminated KL-SG HSR with a similar overhead cost.
He also said the government has already selected the technologies involved and named a “crony” private company as the main contractor cum operating company without any tender.
“The PN government has already planned to pay yearly compensation to the operating company since the HSR will not be profitable in the long run due to reduced passenger traffic and lowered fare revenue if Singapore is excluded,” he said in a statement on Facebook.
He said it would be heart-breaking if the PN government continues its plan to replace the cancelled HSR project with a domestic line that would not be beneficial to foreign investments, while the country is saddled with paying compensation annually since the operating company would be operating at a loss.
“Such is a model of crony projects during the time of PM4 where the government needed to sustain annual compensations and bail-outs after bail-outs for private transportation companies,” he added, subtly referring to political rival Tun Dr Mahathir Mohamad.
Stressing that Malaysia stands to owe billions of ringgit following the termination, Najib said studies have shown that Malaysia could have reaped significant benefits from neighbouring Singapore.
He cited the success of Channel Tunnel—a 50.45-km railway tunnel between the island of Great Britain and the European mainland, also known as Eurotunnel—as a testament to the possible success of the now terminated HSR project.
“If travel time between our countries is made more efficiently and quickly with the HSR, more tourists from Singapore will visit Malaysia as compared to Malaysians visiting Singapore.
“The positive economic impact will reach trillions and trillions within the next 50 years as not just development within the tourism sector will intensify, but foreign investment and employment from Singapore as well through the connectivity of the two most capitals in the region,” he said.
Explaining further, Najib said the reason why Singapore wanted to continue with the project was because they wished to be part of a region-wide HSR network which was to be expanded to Thailand in the near future.
“Singapore wants to be involved with the vision of Asean integration, which will attract more foreign investment to the region,” he said.
Najib also dispelled the claims that the project’s termination was due to Singapore’s insistence in disapproving the proposed route of the HSR through Kuala Lumpur International Airport which could affect Changi Airport.
“This is a very nonsensical excuse because Singaporeans want to visit KL directly, not KLIA,” he said.
He also pointed out that the ongoing Covid-19 crisis was the most suitable time to resume the project to stimulate the economy and provide employment due to cheaper raw materials and unemployment.
Meanwhile, Umno Youth is disappointed by the decision to terminate the HSR.
“The cancellation of a high-impact infrastructure project which has a multiplier effect is a step back and ‘counter-productive’ in the efforts to revive the economy post-Covid-19.
“The Malaysian government’s action is a big blunder because it goes against the current trend of economic development seen in neighbouring countries,” Umno Youth chief Datuk Dr Asyraf Wajdi Dusuki said in a Facebook post on Saturday (Jan 2).
He said the country would lose out on an estimated RM209 billion in gross national income (GNI) and a potential of 70,000 jobs lost.
Dr Asyraf added that the cancellation of the HSR would affect the big vision to transform the country towards becoming a high-income nation that would have been enjoyed with the opening of new development clusters along the HSR line.
He said that the HSR was a key benchmark for progress and development in Asean, and if it was implemented, would have been the first high-speed rail link to cross borders in the region.
“Umno Youth wants the government to give more solid reasons than the simple Covid-19 excuse,” he said, adding that they wanted the government to clarify news that the project will be replaced by another HSR project that will end in Johor Baru with the same cost.
Johor PKR deputy chief Jimmy Puah Wee Tse said the termination of the HSP was a “missed opportunity” not only for Johor but Malaysia as well.
He said the termination had clearly exposed the PN government’s weakness.
In a statement today, Puah said the many news agencies since November last year have been reporting on the possibility that the HSR’s Bilateral Agreement will be terminated.
“Many inks have been spilled over this matter. Some have argued on the decisiveness of the government to stop the project, while some have commented on how we ended up in this mess,” said Puah.
Puah said the HSR could have been a game-changer and a great economic catalyst if it was managed well from the start.
“In the end, all we ended up with is a compensation bill of RM300 million or more,” he said.
Yesterday, Malaysia and Singapore both issued separate statements to announce the automatic termination of the HSR Bilateral Agreement.
Singapore’s Ministry of Transport said Putrajaya had allowed the HSR bilateral agreement to be terminated and has agreed to compensate the island republic for costs already incurred in fulfilling its obligations under the agreement.
Malaysia, on the other hand, said it would honour its obligations under the HSR Bilateral Agreement with Singapore and pay compensation.
The HSR was targeted to be up and running by 2026 and was expected to cut travel time between Kuala Lumpur and Singapore to just 90 minutes.
The HSR line was to stretch 350 km, with 335 km in Malaysia and 15 km in Singapore.