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SINGAPORE – Singapore was unable to accept Malaysia’s proposal to remove the systems provider and network operator from the high-speed rail (HSR) project as it constituted a “fundamental departure” from the original agreement, the Transport Minister said, Ong Ye Kung.
This “particularly significant change” to eliminate the Assets Company (AssetsCo) was Singapore’s main concern, it said in Parliament on Monday (January 4), and had led to the completion of the HSR Kuala Lumpur-Singapore project.
Malaysia had allowed the bilateral agreement to expire on the December 31, 2020 deadline, after both sides were unable to agree on the changes it had proposed.
Responding to Workers’ Party MP Louis Chua (Sengkang GRC) on the substantial differences between the two parties that led to the termination, Mr. On noted that the cross-border HSR service, if it had gone ahead, must be a single train system. operating between Singapore and Kuala Lumpur.
“Because neither country has the expertise and experience to operate the HSR, we agreed under the HSR bilateral agreement to name the best player in the industry through an open and transparent international tender to assume the role of AssetsCo.” said.
“Once appointed, AssetsCo will supply the train system, operate the network, ensure that cross-border HSR service is given proper priority over Malaysian domestic service, and be accountable to both Singapore and Malaysia.”
For Singapore, AssetsCo is the “centerpiece” of the HSR project and is necessary to ensure that the interests of Singapore and Malaysia are protected, he added.
“This will minimize the possibility of future disagreements and disputes over the long duration of the project, which will last decades,” said Mr. Ong.
“Therefore, Singapore informed Malaysia that the disposal of AssetsCo constituted a fundamental departure from the HSR bilateral agreement and could not be accepted.”
In response to Mr. Melvin Yong (Radin Mas), Mr. Ong said that another change proposed by Malaysia, to connect the HSR to Kuala Lumpur International Airport, would have led the high-speed line to share tracks with a railway line. existing connecting the airport.
“The Express Rail Link is a model of the existing train system (that) runs at half the maximum speed of HSR, so if we had proceeded there would have been a lot of technical problems to solve,” he said. “But with that said, the main concern for us was the disposal of AssetsCo.”
Both countries signed the legally binding bilateral agreement in 2016 after three years of negotiations.
At the request of Malaysia, both parties signed a supplemental agreement in May 2018 to suspend construction of the project. A second agreement was signed to extend the suspension until December 31, 2020, “with the explicit understanding that it would be the final extension,” Ong said.
With the completion of the project, Malaysia has to compensate Singapore in accordance with the HSR agreements, Mr. Ong noted.
S’pore has spent $ 270 million on HSR
The minister told Parliament that Singapore has spent around $ 270 million on the HSR project so far.
This is lower than a previous estimate of around $ 300 million provided by former transport minister Khaw Boon Wan in 2018 as Singapore had managed to liquidate contracts and keep activity low, he said.
The compensation to be paid by Malaysia will include various abortifacient costs, such as consulting services, infrastructure design and labor to implement the HSR Project. It will not include the costs of acquiring the land, as the value of the land is recoverable, Ong added.
Singapore is also verifying a “small component” of miscellaneous abortion costs “for the suspension of the project requested by Malaysia, he said.
The amount and the payment schedule are specified in the agreements, Ong said, adding that he was unable to disclose the figure due to confidentiality reasons.
The Malaysian minister in the prime minister’s department, Mustapa Mohamed, has said that Malaysia will fulfill its obligations and that both countries will initiate the necessary procedures to determine the amount of compensation.
Malaysia had remitted $ 15 million to Singapore in 2019 as payment for abortion costs incurred by the Republic as a result of the initial suspension of the HSR project. This amount covered costs related to the suspension, such as contract breakage and labor, and is not part of the compensation.
In response to Mr. Saktiandi Supaat (Bishan-Toa Payoh GRC), Mr. Ong said that Singapore remains ready to discuss any new proposals on the KL-Singapore HSR or similar projects in the future.
“If we are open to future discussions, of course we are. But it should be on a clean slate after we establish the current bilateral HSR agreement, ”he said.
General momentum, vision for Jurong Lake District unaffected
Mr. Ong also assured the House that the completion of the HSR does not affect the overall momentum and vision for the Jurong Lake District (JLD).
In response to Mr. Ang Wei Neng (West Coast GRC), he noted that the National Development Ministry had begun planning the transformation of Jurong in 2008, as part of a broader effort to develop urban centers outside the central business district.
Therefore, the plans for the JLD were developed long before Malaysia proposed the current HSR project, he said, adding: “It was only much later, in 2015, that we decided to locate HSR’s Singapore terminal in Jurong.” .
While some details may need to be adjusted along the way due to the completion of the HSR, he said the JLD will be the largest commercial and regional hub outside of the city center when completed.
The parcels of land that the government has acquired are still necessary to carry out these plans, the minister added.
The Jurong Country Club site will provide new mixed-use development and community facilities, while the Raffles Country Club site is still needed for the Cross Island Line western depot and an integrated train test center.
“We will be able to harness the full potential of the land to benefit Singaporeans,” Ong said.
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