Singapore 'knows what we want to do' on HSR issue, says Malaysian PM Mahathir

PUTRAJAYA — The Singapore Government is aware of Malaysia's intentions with regards to the Kuala Lumpur-Singapore High Speed Rail (HSR) project, even if Putrajaya has not communicated its official position on the matter, Malaysian Prime Minister Dr Mohamed Mahathir insisted on Tuesday (July 10).

He also cited possible “negative market reaction” as a reason why Malaysia is coy on informing Singapore whether it intends to continue, postpone or cancel the project.

“Decisions are not easily made. When we make a decision and announce it, the market reacts negatively," he said.

"So that is why, we have to be very careful about what we say.”

His comments came a day after Singapore's foreign and transport ministers told Parliament that Malaysia had yet to respond to an official request to clarify its position on the proposed 350km rail line. They added that Singapore continues to incur hefty costs on the project as both countries are legally bound by a bilateral agreement.

Since winning the May 9 election, Dr Mahathir and his Cabinet ministers had said in several media interviews that Malaysia could not afford to proceed with the HSR due to mounting government debts. But the Malaysian position has also shifted from an outright cancellation to a postponment.

Dr Mahathir had announced on May 28 that Malaysia is scrapping the HSR project as part of drastic cuts to government spending and investment that are required for the country to “avoid being declared bankrupt”, adding that the project is "not beneficial".

He described Malaysia' decision as "final" though he noted that "it will take time because we have an agreement with Singapore".

But two days later, asked if the HSR would be revisited once Malaysia's finances are better, he said: "Definitely."

And on June 11, he stated that Malaysia was postponing but not scrapping the project.

"There will be a need for high-speed rail in the future, probably right through the peninsula. But we cannot afford it at this moment. So we actually postponed the implementation of that project," he told Nikkei Asia Review in an interview.

On Monday, Singapore's Foreign Minister Vivian Balakrishnan and Transport Minister Khaw Boon Wan told Parliament that the Republic had sought an official clarification from Malaysia on the fate of the HSR. But Putrajaya has yet to respond with an official reply.

Meanwhile, the Republic had "no choice" but to continue with the rail project at the moment as both countries are "legally bound to perform our obligations under the bilateral agreement, regardless of any changes in the Government", said Mr Khaw.

When asked on Tuesday to respond to the latest remarks by the Singapore ministers, Dr Mahathir told reporters: "As far as the Singapore government is concerned, we have not given them full notice yet but they know what we want to do."

The Malaysian premier, who turned 93 on Tuesday, smiled and did not give further details when pressed to clarify his remarks on what he wanted to do with the HSR project.

He said, however, that the Pakatan Harapan government has to be careful about its comments so as not to trigger any backlash in the financial markets.

"The market, apparently, like to be told lies about how good everything is (so that) they will give you good marks. If we tell them that we have discovered a lot of wrongdoings, they react by running away with (their) money, they will stop investing and all that," he said.

“But in fact what we are doing now is that to ensure this country is financially run properly. That’s what we are doing. They should appreciate it. But their initial reaction is ‘oh RM1 trillion (in debt), let’s get out of here.’ That is their reaction.”

Mr Khaw had disclosed on Monday that Singapore could incur some S$300 million on the HSR project by year-end, adding that it was in Malaysia’s interest to clarify its official position early as the ongoing costs would add to the compensation which the Pakatan government would have to pay.

"The Singapore Government will continue to press for official clarification from the Malaysian Government. There are appropriate processes at law in case Malaysia should wish to propose changes to the bilateral agreement, or to terminate it. These due processes should be followed," he told Parliament.

"If the Malaysian Government fails to provide an official response, then we cannot ignore the public statements made by the Malaysian Ministers, and Prime Minister Dr Mahathir himself, on the termination of the Project, and Singapore will act according to its rights."

The HSR, a project that Malaysia proposed to Singapore in 2013, would have slashed rail travel time between Singapore and Kuala Lumpur to 90 minutes. AGENCIES