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KUALA LUMPUR, Jan 4: Malaysia is of the opinion that the amount of compensation to be paid to Singapore for the completion of the Kuala Lumpur-Singapore high-speed rail (HSR) project will be much less than S $ 270 million, the minister said. in the Department of the Prime Minister (Economy) Datuk Seri Mustapa Mohamed.
He was referring to Singapore’s Transport Minister Ong Ye Kung’s observation that Singapore spent more than S $ 270 million on the project, including costs for consulting services and labor.
“The Transport Minister also said that the compensation would not include the costs of the land and we are made to understand that the Singapore government has acquired several land to implement the project.
“Therefore, we are confident that the cost of compensation will be much less than S $ 270 million. Anyway, the matter has not been finalized and will be discussed soon, ”he said during the Agenda Awani program tonight.
On January 1, Malaysia and Singapore jointly announced the cancellation of the 350km railway line project after failing to reach an agreement on the proposed changes before the December 31, 2020 deadline.
The bilateral agreement for the development of the project, signed with Singapore on December 13, 2016, was based on the aspiration of greater economic integration between the two countries.
The construction of the ISS, proposed in 2010 as one of the Economic Transformation Program initiatives, was postponed until May 2020 after Malaysia’s 14th General Election, following a review of various government investment commitments.
Mustapa, via Facebook, said this morning that the compensation figure for the cancellation of the HSR project could not be disclosed as both Malaysia and Singapore were subject to a confidentiality clause in the bilateral agreement.
However, during tonight’s live broadcast, he assured that the government would announce the amount of compensation as soon as it was finalized.
Additionally, Mustapa said, the government could save 30 percent by not using the services of Asset Company (AssetCo).
It was previously announced that AssetCo would be responsible for the design, construction, financing and maintenance of all rolling stock, as well as the design, construction, financing, operation and maintenance of all rail assets, such as track works, energy, signaling and telecommunications for the HSR. draft.
“The Malaysian government had given AssetCo a 30-year guarantee worth RM60 billion, or about RM2 billion annually.
“The guarantee would mean that if the payments to AssetCo were less than RM60 billion, the government must pay using other revenues to fill the gap. This is also a form of savings, ”he said.
Mustapa said that taking design, seasons and other things into account with the non-AssetCo approach, the overall estimated cost savings was 30 percent, a large number by any standards.
Digging deeper, he said Malaysia was still interested in continuing the HSR project which was deemed beneficial to the economy, but the current economic situation due to COVID-19 forced it to review the implementation model.
“According to a study, the benefits to the economy over 50 years would amount to about 300 billion ringgit. The benefits are great, so we are still eager to implement the project.
“It is just the model, or method, that we feel may not be appropriate in the midst of the COVID-19 situation. So we take another look, ”he added.- Bernama
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