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HSR project terminated, Malaysia 'has to compensate' Singapore for costs incurred

SINGAPORE — The Kuala Lumpur-Singapore High Speed Rail (HSR) project has been terminated, after both countries failed to reach an agreement on changes proposed by Malaysia by the deadline of Dec 31.

HSR project terminated, Malaysia 'has to compensate' Singapore for costs incurred

A concept design of the Iskandar Puteri High Speed Rail station in Johor, Malaysia that was unveiled in Oct 2017.

SINGAPORE — The Kuala Lumpur-Singapore High Speed Rail (HSR) project has been terminated, after both countries failed to reach an agreement on changes proposed by Malaysia by the deadline of Dec 31.

Prime Minister Lee Hsien Loong and his Malaysian counterpart Muhyiddin Yassin said this in a joint statement on Friday (Jan 1), adding that the HSR agreement signed by the two neighbours in 2016 will be terminated. 

“Both countries will abide by their respective obligations, and will now proceed with the necessary actions, resulting from this termination of the HSR Agreement,” the statement read.

“Both countries remain committed to maintain good bilateral relations, and cooperate closely in various fields, including strengthening the connectivity between the two countries.”

In a separate statement, the Ministry of Transport (MOT) said that Malaysia has "to compensate Singapore for costs already incurred by Singapore in fulfilling its obligations under the HSR bilateral agreement in accordance with the parties’ agreement". 

Former Transport Minister Khaw Boon Wan had previously said that the costs include the setting up of SG HSR — an infrastructure company that is a wholly owned subsidiary of the Land Transport Authority — which had already hired many employees to work on the project.

The fate of the project, which was touted to cut travel times between Singapore and Kuala Lumpur to 90 minutes, had long been thrown into doubt since Malaysians elected a new government to replace former prime minister Najib Razak’s in May 2018.

Shortly after being elected, then prime minister Mahathir Mohamad had said that he wanted to scrap the project to rein in the country’s RM1 trillion (S$330 billion) debt. 

The construction of the HSR project was later suspended, from Sept 2018 to Dec 31, 2020, at Malaysia’s request, with the understanding that the extension of the suspension period until Dec 31 would be the final extension. 

More recently, Malaysian media started reporting that the Muhyiddin government had decided to resume the HSR on Nov 25 but have it end at Bukit Chagar in Johor Baru, Malaysia instead of Jurong East in Singapore as previously planned.

PM Lee last met Mr Muhyiddin via a video conference on Dec 2 to review the status of the project, including changes proposed by Malaysia to the HSR project in light of the impact of Covid-19 pandemic on the Malaysian economy.

“Both governments had conducted several discussions with regard to these changes and had not been able to reach an agreement,” the two prime ministers said in their latest statement.

“Therefore, the HSR agreement had lapsed on Dec 31, 2020.”

The MOT statement said: "Our relationship with Malaysia is deep and multi-faceted, and we look forward to continued good relations and close cooperation with Malaysia for the mutual benefit of the people of both countries."

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HSR Malaysia transport Ministry of Transport

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