No compensation involved for HSR second deferment

The project extension and deals that are attached to it were mutually agreed by both countries, says Azmin


THE second deferment of the Kuala Lumpur-Singapore high-speed rail (HSR) project that begins this month until the end of the year will not involve any compensation from either country.

Senior Minister and International Trade and Industry (MITI) Minister Datuk Seri Mohamed Azmin Ali (picture) said the project extension and deals that are attached to it were mutually agreed by Singapore and Malaysia.

During the first deferment in September 2018, Malaysia and Singapore agreed to suspend the construction of the HSR until May 2020 with Malaysia having to reimburse the republic S$15 million (RM45.1 million).

Last month, Azmin and his Singapore counterpart agreed to the deferment, stating that the upcoming seven months’ discussions would encompass some of the proposed changes in the commercial and technical aspects of the project.

Azmin was appointed to lead the Malaysian team in the discussions with the Singapore government on this project.

“If we can conclude the whole exercise within three to four months, certainly we will meet again,” Azmin told the press after meeting officials at the MITI in Kuala Lumpur yesterday.

He added that the technical team would be meeting after the Hari Raya Aidilfitri season ends.

However, he did not rule out the possibility of a cost increase for the project, initially valued at RM10 billion, due to any further deferment.

“Certainly, the inflation rate will push the cost up, but the mandate given to us when we defer the project in 2018 was to look at the costing, the new alignment and the design again, so that we will be able to reduce the investment.

“Now, we have agreed to continue the project, but we need more time to discuss the details,” Azmin said.

On Putrajaya’s financial capability to support any increase, Azmin said the government would explore greater participation from the private sector in the development of the project.

“Besides aiming for savings from this project, we need to also work on the financing part. For this, we need to look at our current fiscal position, as it is quite tight.

“However, we will look at how private parties can be part of the project. The cooperation between the public and private sectors is crucial,” Azmin added.

Last month, Singapore’s Transport Ministry confirmed that Malaysia had proposed some changes to the HSR project along with a seven-month extension that would allow both sides to examine the new ideas.

In a spirit of bilateral cooperation, the ministry said Singapore has agreed to a “final extension” of the HSR project suspension by seven months to Dec 31, 2020.

“We look forward to receiving Malaysia’s formal proposal on the changes to the HSR project soon, so that both sides can begin discussions immediately,” the republic’s Transport Ministry stated.