Malaysia has been spared an RM500 million penalty after reaching an agreement with Singapore on a two-year deferral of the Kuala Lumpur-Singapore High-Speed Rail (HSR) project.
According to a report by The Edge, the deferral will be in effect until May 31, 2020.
Citing sources, it said the agreement was reached “in a spirit of good neighbourliness”.
The source added that Singapore recognised the strain the project’s construction could have on Malaysia’s financial health.
“It is worth noting that the legally binding agreement between the two nations for the project, signed in 2016, contains no provisions for such a postponement,” the report said.
Malaysia would have faced up to RM500 million in penalties, had it decided to drop the project.
Pakatan Harapan, after taking over the government after the May 9 general election, had revealed the project could cost up to RM110 billion.
Economic Affairs Minister Datuk Seri Azmin Ali led a Malaysian a team to negotiate the agreement a few days ago. He held meetings with Singapore Transport Minister Khaw Boon Wan and the republic’s Foreign Minister Dr Vivian Balakrishnan.