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Jakarta, CNBC Indonesia – The Malaysian and Singaporean governments agreed to halt the $ 25 billion (Rs 352.89 trillion) high-speed rail project that was signed in 2016. The deal was reached after lengthy negotiations failed to break the deadlock. on Malaysia’s demands for changes to the project plan. .
As SCMP reported, on Friday (1/1/2021), the Malaysian government had to pay a fine of more than 100 million Singapore dollars (Rp. 1.06 billion) to the government of Singapore. In a joint statement between Malaysian Prime Minister Muhyiddin Yasin and Singaporean Prime Minister Lee Hsien Loong, Singapore confirmed that it would not be able to accept Malaysia’s proposed changes until the December 31, 2020 deadline.
“The two countries will comply with their respective obligations and will now proceed with the necessary actions as a result of the completion of the project,” said a joint statement between the two countries.
“(The two countries) are committed to maintaining good bilateral relations and cooperating closely in various fields, including strengthening the connectivity of the two countries.”
As an example, in 2016 the bilateral agreement was signed for this ambitious project worth 25 billion dollars (352.89 trillion rupees). At that time, the post of Prime Minister of Malaysia was still held by Najib Razak.
However, the situation changed because Najib was involved in the 1MDB corruption case. This was followed by political turmoil in Malaysia, where there were two changes of government.
The Pakatan Harapan Alliance, which unexpectedly won the 2018 elections, requested that this project be renegotiated. They question the costs and benefits of the project. Another reason is concern about the accumulation of debt that Malaysia has to endure.
The Pakatan Harapan government was overthrown last March. The new government of Prime Minister Muhyiddin is working on several changes to the plan, including redesigning the railway line to connect it to Kuala Lumpur International Airport (KLIA). However, the Singapore office rejected the request.
The Covid-19 pandemic is also a significant factor behind the cancellation of this agreement. This is because there are expectations that the volume of travel in the coming years will be significantly affected due to changes in work-related travel patterns. Not to mention that there is a phenomenon of increasing use of video conferencing.
Initially, the high-speed rail project aimed to reduce travel time from Kuala Lumpur city center to Singapore’s business center to 2.5 hours from an average of just over four hours by air.
The travel time through the train line is 90 minutes, the same as the flight duration when calculating the stages from take-off, landing to taking a taxi. Using buses (the cheapest means of transport between Kuala Lumpur and Singapore) takes an average of six and a half hours.
Before the Covid-19 pandemic, a study by researchers in Japan estimated that the project would generate annual economic benefits of $ 1.6 billion for Malaysia and $ 641 million for Singapore by 2030.
[Gambas:Video CNBC]
(Friends / dob)
