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PETALING JAYA: Disagreements over the project structure, alignment and station layout is what led to the failure of the Kuala Lumpur-Singapore high-speed rail (HSR) project.
Mustapa Mohamed, a minister in the Prime Minister’s Department of Economic Affairs, has said that both Malaysia and Singapore cannot agree on several issues.
Mustapa, often known as Tok Pa, said in a statement that the government had explored numerous alternative ideas aimed at reducing the cost of the project since late 2018 (when Pakatan Harapan took over), as the original structure of the project would have required. substantial long-term government guarantees.
“The new project structure was expected to provide the government with flexibility in financing options, such as deferred payments, public-private partnerships and the ability to access financing at favorable rates,” he said.
“The proposed changes in the structure of the project would have allowed us to take advantage of the project to accelerate Malaysia’s economic recovery, bringing the start of the construction phase forward by almost two years.”
He said the severe impact that the Covid-19 pandemic has had on the economy only increased the need to reduce project costs.
The two governments were unable to reach consensus on the proposals before the bilateral agreement expired on December 31, 2020.
Tok Pa said the government will now continue to explore alternative options, including the feasibility of a national high-speed rail project and the value it would bring to Malaysians.
He added that Malaysia would abide by the original terms and begin discussions with Singapore to determine the appropriate amount of compensation they will receive.
A well-located source in Putrajaya had told FMT that Malaysia would have to pay Singapore around RM320 million in compensation.
