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KUALA LUMPUR: Malaysia will fulfill its obligations under the Bilateral Agreement for the canceled high-speed rail (HSR) project, Prime Minister’s Department Minister Mustapa Mohamed said on Friday (January 1).
The governments of Singapore and Malaysia had announced the termination of the HSR project on Friday following the expiration of their agreement on December 31, 2020.
“Under the Bilateral Agreement and the previously agreed terms, Malaysia will comply with its obligations under the Bilateral Agreement. Both countries will initiate what is necessary to determine the amount of compensation ”.
He said that the COVID-19 pandemic had seriously affected the Malaysian economy and that the terms of the Bilateral Agreement signed in 2016 were no longer viable for Malaysia given the current economic situation.
“Since the end of 2018, the government has explored a number of alternatives to reduce the cost of the Kuala Lumpur-Singapore high-speed rail (HSR) project. This has become more urgent with the onset of the COVID-19 pandemic. “
READ: From Conception to Completion: KL-Singapore HSR Project Timeline Over 8 Years
Mustapa added that since mid-2020, the Malaysian government had proposed some changes to the project, including the project structure, alignment, and station layout.
The original structure of the project, he said, would have required substantial and long-term government guarantees.
“The new structure of the project is expected to give the Government flexibility in financing options, such as deferred payments, public-private partnerships and the possibility of accessing financing at favorable rates,” he said.
“More importantly, the proposed changes to the project structure would have allowed us to leverage the HSR project to accelerate Malaysia’s economic recovery after the COVID-19 pandemic, bringing the start of the construction phase forward by nearly two years.”
He added that both governments had held a series of discussions on their respective positions taking into account the previous changes.
“However, we had not been able to agree on these changes,” he said.
On Friday, Singaporean Prime Minister Lee Hsien Loong and Malaysian Prime Minister Muhyiddin Yassin announced that the project would be suspended after the HSR Bilateral Agreement expired on December 31, 2020.
Mustapa added: “In the future, the government will carry out a detailed study to explore all possible options, including the feasibility of a national HSR project and its benefits for Malaysians.”
