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PETALING JAYA: After more than two years of uncertainty, the curtain has finally fallen on the proposed Kuala Lumpur-Singapore high-speed rail (HSR) project.
In a joint statement yesterday, Prime Minister Tan Sri Muhyiddin Yassin and his Singaporean counterpart Lee Hsien Loong said the two governments decided to let the HSR deal expire on December 31, 2020, after negotiations and various discussions. they did not give acceptable results.
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“In light of the impact of the Covid-19 pandemic on the Malaysian economy, the Malaysian government had proposed several changes to the HSR project.
“Both governments had held several discussions about these changes and had not been able to reach an agreement.
“Therefore, the HSR agreement expired on December 31, 2020, both countries will comply with their respective obligations and will now proceed with the necessary actions resulting from this termination of the HSR agreement,” the statement read.
It includes determining the compensation that Malaysia will have to pay to Singapore.
“Both countries remain committed to maintaining good bilateral relations and cooperating closely in various fields, including strengthening connectivity between the two countries,” the statement said.
In a separate statement later, the Prime Minister’s Department Minister Datuk Seri Mustapa Mohamed said that the pandemic had severely affected Malaysia, to the point that the details of the project were no longer sustainable.
“The terms of the bilateral agreement signed in 2016 are no longer viable for Malaysia, given the current economic situation that has negatively affected Malaysia’s fiscal position.
“Since the end of 2018, the government has explored a number of alternatives to reduce the cost of the HSR project.
“This became more urgent with the onset of the pandemic.
“Since the middle of last year, the Malaysian government had proposed some changes to the project, including the project structure, alignment and layout of the station.
“The structure of the original project would have required substantial and long-term government guarantees,” Mustapa said.
He said that under the amended project structure, Malaysia expected more flexibility in financing options such as deferred payments, public-private partnerships and the ability to access financing at favorable rates.
“More importantly, the proposed changes to the project structure would have allowed us to leverage the HSR project to accelerate Malaysia’s economic recovery from the pandemic, bringing the start of the construction phase forward by nearly two years.
“This would have provided a much-needed boost to our construction industry and its supporting ecosystem.
“With these changes in mind, both governments had held a series of discussions on our respective positions.
“However, we could not reach an agreement on these changes,” Mustapa said, adding that the two countries would proceed to determine the amount of compensation, according to the terms of the bilateral agreement.
He also addressed the possibility of a slower train service as an alternative.
“In the future, the government will carry out a detailed study to explore all possible options, including the feasibility of a national ISS project and its benefits for Malaysians,” he said.
Before yesterday’s official announcement, some media outlets had reported that Malaysia will “go it alone”, possibly by opting for medium-speed trains such as those used for Express Rail Link (ERL) covering the 56 km distance between KL Sentral and Kuala. Lumpur International Airport.
ERL rolling stock (a combination of European and Chinese train sets) has top speeds ranging from 160 km / h to 170 km / h, which is quite similar to the ETS train sets used by KTMB.
The HSR project was raised as part of the Economic Transformation Program in 2010 during the Datuk Seri Najib Razak administration, which aimed to bring Malaysia to a high-income nation state by 2020.
When proposed, the HSR was touted as a bridge between two of Southeast Asia’s most vibrant and fast-growing economic engines, seamlessly connecting eight cities or growth centers (seven in Malaysia, with Singapore’s Jurong East).
When the Pakatan Harapan coalition took over Putrajaya in 2018, then-Prime Minister Tun Dr Mahathir Mohamad announced that the project would be scrapped, citing the cost.
He later said that the project would be postponed and the two governments went to the negotiating table.
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