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KUALA LUMPUR (Bernama): 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 is much less than S $ 270,000 (821,000), the Minister. in the Department of the Prime Minister (Economy) Datuk Seri Mustapa Mohamed.
He was referring to Singapore’s Transport Minister Ong Ye Kung’s comment 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 land costs and we are made to understand that the Singapore government has acquired various land to implement the project.
“Therefore, we are confident that the cost of compensation will be much less than S $ 270 million. However, the matter has not been finalized and will be discussed soon,” he said during the Agenda Awani program on Monday, January 4. at night.
On January 1, Malaysia and Singapore jointly announced the cancellation of the 350 km railway line project after failing to reach 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.
Construction of the HSR, 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 several of the government’s investment commitments. The two governments postponed the project for the second time until December 31, 2020.
Mustapa, via Facebook, said on Monday 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.
Furthermore, Mustapa said, the government could save 30% 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 in the amount of RM60bil, or around RM2bil a year.
“The guarantee would mean that if the payments to AssetCo were less than RM60bil, the government must pay using other income to cover the gap. This is also a form of savings,” he said.
Mustapa said that taking design, seasons, and other things into account with the no AssetCo approach, the total estimated cost savings was 30% – a large amount by any account.
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 one study, the benefits to the economy over 50 years would total about $ 300 billion. The benefits are great, so we are still eager to implement the project.
“It’s just the model, or method, that we feel might not be appropriate in the midst of the Covid-19 situation. So we take another look,” he added. – Bernama
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