Malaysia to Pay RM45M to Singapore to Defer HSR by Two Years

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Malaysia will have to pay about RM45 million (S$15 million) to Singapore after an agreement was reached to postpone the High-Speed Rail (HSR) project by two years.

The agreement was signed between both governments yesterday, with the abortive cost to be paid to the island state by Jan 31, 2019.


The side letter – which was inked by Economic Affairs Minister Datuk Seri Mohamed Azmin Ali and Singapore Transport Minister Khaw Boon Wan – states that the construction of the project would be suspended up to May 31, 2020.

As such, the HSR service between Kuala Lumpur and Singapore is only expected to commence by Jan 1, 2031, as compared to the original commencement date of Dec 31, 2026.

Both countries have also agreed that Malaysian would be required to bear the cost incurred by Singapore for the project up to the suspension period should it decide not to proceed after the May 31, 2020 date.

Mohamed Azmin said both governments reached an understanding on the two-year deferment period after a series of intense negotiations over the past several weeks.

“Khaw and I met again on Aug 27 and 28 to discuss the finer details of the agreement, before agreeing to the abortive cost to be paid by Malaysia amounting to S$15 million by January 2019.

“In the event, we cancel (the project), we have met and discussed (about it), but I don’t want to jump to conclusions because the agreement signed today clearly states our commitment to continue with the project after May 2020,” he told a press conference yesterday.

He added that the May 31, 2020 date was reached after agreeing that any deferment beyond two years would require a change in business model and escalated the cost.

Present to witness the signing ceremony were Prime Minister Tun Dr Mahathir Mohamad, Deputy Prime Minister Datuk Seri Dr Wan Azizah Wan Ismail Singapore Deputy Prime Minister Teo Chee Hean.

The side letter signed today ends months of uncertainty surrounding the multi-billion ringgit project. – The Sun

Earlier report: Sept 3, Report: Malaysia Spared RM500M Penalty in HSR Postponement