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In U-turn, Dr Mahathir says Malaysia to negotiate deferment of HSR with Singapore

KUALA LUMPUR — Malaysia will look to negotiate the deferment of a high-speed rail project with Singapore, Malaysian Prime Minister Mahathir Mohamad said on Thursday (July 19).

In U-turn, Dr Mahathir says Malaysia to negotiate deferment of HSR with Singapore
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KUALA LUMPUR — Malaysia will look to negotiate the deferment of a high-speed rail project with Singapore, Malaysian Prime Minister Tun Dr Mahathir Mohamad said on Thursday (July 19).

When asked by reporters on whether there are options to defer the project or reduce the cost, he replied: “At the moment when we look at the financial situation of the country, we thought that we couldn’t go ahead with that.”

"The problem is that if we just unilaterally discard the agreement, we have to pay a very high compensation."

Having studied the contract, it was decided that “we will have to do it at a later date or we may have to reduce the price”, Dr Mahathir added.

“But the reduction of the price, I think it is very difficult as far as we can make out, so it will have to be deferred.”

The HSR project, first proposed by Malaysia in 2013, is a 350km line that would have slashed rail travel time between Singapore and Kuala Lumpur to 90 minutes.

But its fate has been uncertain since the new Pakatan Harapan government won the May 9 election, with Dr Mahathir and some of his cabinet ministers vowing to scrap the project in order to trim Putrajaya’s RM1 trillion (S$336 billion) debt.

Singapore’s transport minister Khaw Boon Wan said the Republic had sent a diplomatic note to Malaysia on June 1 seeking clarification on its position on the HSR project.

Meanwhile, Singapore continues to incur cost on the project, with expenditure expected to hit some S$300 million by year-end, Mr Khaw told Parliament on July 9, warning that a “significant” amount of the funds spent would be “completely wasted” if the project was called off.

Both sides have agreed to a meeting between their officials to discuss the project. The Malaysian Government has informed the Singapore Government that it will communicate the proposed dates of the meeting by July 31.

On Wednesday, Malaysian economic minister Azmin Ali also said that Putrajaya’s estimated RM110 billion cost for the HSR project includes expenses and items not disclosed by the previous administration.

He accused the previous Barisan Nasional government of a cover-up in its previous claims that the project would cost between RM55 billion to RM74 billion.

Hours after Dr Mahathir's remarks, Mr Azmin said on Thursday that he would renegotiate all the components involved which bloated HSR’s costs when he visits Singapore later this month.

“Everything. We will look and revisit all the terms and conditions in the agreement. Everything. The entire project needs to be reviewed,” he told reporters when met at the Parliament lobby.

“PM has made it very clear today that it’s not about canceling the project. We need to review the entire project.”

He said Malaysia’s main concern was reducing the government debt instead of undertaking projects that cost billions.

“The priority is quite clear. We want to reduce the debt that we are facing now. So maybe if the project is viable at a later stage then we can discuss. But our priority now one is to cut cost and reduce government debt,” he said. AGENCIES

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