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PETALING JAYA: Malaysia wanted to avoid a 30-year RM60bil warranty under the revised changes to the recently canceled Kuala Lumpur-Singapore high-speed rail (HSR) project, says Datuk Seri Mustapa Mohamed.
“During the last six months, several intensive discussions were held at the technical and ministerial level.
“Our Prime Minister and the Prime Minister of Singapore also held a video conference on December 2, 2020.
“Unfortunately, we couldn’t reach an agreement.
“As an individual who has been directly involved in the two-way discussions for the past six months, I wish to emphasize that we did our best to safeguard the interests of the nation,” the minister from the Prime Minister’s Department said in a Facebook post. on Monday (January 4).
It added that among the proposed changes presented by Malaysia was a new and more orderly project structure based on HSR models in Europe, the UK, Japan and South Korea.
“The new proposed structure would also avoid the government having to issue a RM60bil guarantee for a period of 30 years.
“Apart from this, it would also have given us more flexibility to finance the project,” he added.
Mustapa also said Malaysia had proposed changes to the station’s alignment and design, which would have further reduced the cost of the project by 30%.
“Another factor that was considered was the possibility of starting the project two years in advance.
“This would have helped accelerate Malaysia’s economic recovery after Covid-19, particularly for the construction industry,” he added.
Although no consensus was reached on the proposed changes, Mustapa noted that the discussions were held in a friendly and constructive manner with both countries seeking to strengthen close ties.
He explained that the bilateral agreement with Singapore to develop the HSR project was signed in 2016 but the project was suspended by the previous administration in May 2018 for review.
However, with the emergence of Covid-19, he said that the current government was forced to find ways to reduce the cost of various mega-projects while ensuring economic recovery after the global pandemic.
“These developments resulted in the original terms, which were signed under bilateral agreements in 2016, no longer viable for Malaysia,” he said, adding that Singapore agreed in May last year to allow Malaysia to postpone the start of the project. until the end. 2020.
On the issue of compensation to Singapore, Mustapa said he could not release details as the exact amount has yet to be determined.
“I wish to emphasize that the compensation is not punitive in nature, but is for reimbursement of specific project costs that were spent by Singapore.
“We are awaiting the details of the costs from Singapore and once received they will be carefully analyzed before verifying,” he added.
Although it is subject to confidentiality under the bilateral agreement, Mustapa said it will discuss with Singapore to allow information on compensation to be shared once finalized.
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