HSR project still under study as S'pore insists on keeping AssetsCo in new deal, M'sian minister tells parliament

KUALA LUMPUR — Putrajaya is still conducting studies on which high speed rail (HSR) project is better for Malaysia, whether the line should end in Johor Baru (JB) or in Singapore, Malaysian Minister Mustapa Mohamed told the Dewan Rakyat (Parliament) on Thursday (Dec 9).

The minister in the Prime Minister’s Department in charge of economic affairs said one of the obstacles in implementing the project was Singapore’s insistence on keeping the jointly-tendered asset company AssetsCo in all agreements.

“This study is to ascertain whether the KL-JB or KL-Singapore line is better and which has better economic spillover effects," he said.

“It has been ongoing since February this year and when it is ready, we will bring it to the Cabinet for discussions.

“The only obstacle we have in any agreement is in the method of implementation. Singapore insists on having AssetCo in the agreement. However, we in Malaysia feel we need alternatives,” Mr Mustapa said in response to a question by Bagan Member of Parliament Lim Guan Eng.

In January, Singapore’s then-Transport Minister Ong Ye Kung said the original HSR agreement between Singapore and Malaysia included the setting up of an assets company to act as a systems supplier and network operator of the HSR service, which would, in turn, ensure that the interests of both countries were protected.

When Malaysia proposed to remove the assets company, Singapore was unable to agree to this “particularly significant change”, which constitutes a fundamental departure” from the HSR bilateral agreement signed by the two neighbours in 2016, Mr Ong said.

Mr Lim questioned Mr Mustapa the reasons for not having AssetsCo in the agreement. The Opposition lawmaker, who is secretary-general of the Democratic Action Party, asked if this was a departure from the open tender which was supposed to happen in a project of this size.

“Having this as an open tender is important to ensure accountability and transparency in such a huge contract such as this," said Mr Lim, a former finance minister.

“It would be better to just cancel the contract entirely.”

Mr Mustapa replied that the Malaysian government felt the project was still viable and was hoping to try and implement the new track to Johor Baru if the studies show it is viable.

The minister said a joint asset company would lead to additional costs that the government could not afford.

Among the questions raised by Mr Lim were whether the KL-JB HSR project would be cancelled and replaced with the KL-Singapore HSR project; how much were the costs of the two projects, and whether negotiations with Singapore would ensure a reduction in the estimated cost by half from RM100 billion.

Mr Mustapa said that with the cancellation of the KL-Singapore HSR, the Malaysian government decided to conduct a feasibility study on a KL-JB HSR project.

"I would like to stress that the possibility of reviving the KL-Singapore HSR project is still in the early stages of discussion," Mr Mustapa said, adding reducing the KL-Singapore HSR project's cost to RM50 billion was yet to be brought up during the discussions.

The KL-Singapore HSR project was initiated during Mr Najib Razak’s time as prime minister and suspended by the Pakatan Harapan administration that won the 2018 general election.

When Mr Muhyiddin Yassin was prime minister, Malaysia paid Singapore RM320 million (S$103.6 million) in compensation for the termination of the project.

In a recent visit to the island republic last month, current prime minister Ismail Sabri Yaakob told his Singapore counterpart Lee Hsien Loong that Malaysia was keen to revive the HSR.

Mr Lee then replied that his government is open to fresh proposals from Malaysia. AGENCIES