HSR to begin operations by January 2031, RM45.1 million to be paid to Singapore for postponement

HSR to begin operations by January 2031, RM45.1 million to be paid to Singapore for postponement

A few days ago, Malaysia’s economic affairs minister Datuk Seri Azmin Ali announced the postponement of the KL-Singapore High Speed Rail (HSR) project, a deferral which will be in effect until May 31, 2020. It has now been revealed that the Pakatan Harapan government will reimburse Singapore with S$15 million (RM45.1 million) following the two-year suspension, The Star reports.

While both Malaysia and Singapore have mutually agreed to suspend the project on the reimbursement amount, Azmin Ali declined to reveal the cost the government would have to pay should the project be cancelled later on. However, early estimates pin the figure around the RM500 million mark, a sum which is to be paid to Singapore if the HSR is scrapped.

“We also discussed what would happen in the event that we cancel the project. But I don’t think I want to jump to a conclusion because the agreement signed [on the suspension] clearly states our commitment to continuing with the project after May 2020,” Azmin Ali said at a press conference with Singapore’s transport minister Khaw Boon Wan recently.

The two had agreed and signed to vary the HSR Bilateral Agreement, one which will see the HSR service begin operations by January 1, 2031 instead of December 31, 2026, as planned earlier. The S$15 million will be paid by end-January 2019.

HSR to begin operations by January 2031, RM45.1 million to be paid to Singapore for postponement

“This agreement would not have happened if not for our strong commitment to strong bilateral cooperation between our two countries. I am confident that this spirit will see us through to the final conclusion of the HSR project,” Azmin Ali noted.

Khaw said although the HSR Bilateral Agreement had no provision for suspension, this was agreed upon in the spirit of bilateral cooperation. He also said Singapore remains committed to the project, adding that the sub 400 km distance between the two capitals were seen by industry experts as a sweet spot.

“If cities are too far away, people would rather fly; if they are too near, they just take the road. But 400 km represents a kind of sweet spot. Singaporeans are looking forward to the realisation of this project,” Khaw added.

On the reimbursement, Khaw said the suspension involved abortive costs due to contractual delays. “As almost the entire stretch of the HSR part in Singapore will be underground, utility services such as gas and water pipes as well as electricity cables have to be diverted and we have already started doing that. All those things mean cost,” he said.

However, should the project be terminated, Khaw said the payment would be for costs incurred by his government for fulfilling its obligations under the HSR Bilateral Agreement up to yesterday’s suspension.

HSR to begin operations by January 2031, RM45.1 million to be paid to Singapore for postponement

The design concept for the Bandar Malaysia station in Kuala Lumpur

“That will be a larger quantum and again, there will be a careful, thorough exercise between the technical people from both sides, going through items and details so that the figures we reach is something that we can defend to our taxpayers,” he said.

Apparently, Azmin Ali said Malaysia initially wanted to postpone the project by up to four years based on current economic conditions, but Khaw said Singapore was only willing to consider a year. “We know that if the deferment period is beyond two years, the business model will change and the cost will continue to escalate. Based on our negotiations, we have mutually agreed on the deferment period,” Azmin Ali said.

Khaw said while Singapore und­erstood why Putrajaya needed to suspend the project, the period of how long this should be would affect the countries and the project itself.

“When you talk about a year-long deferment, it actually means several years of postponing the commencement of the project. When we studied this project, we considered the cost, how much revenue we could take in and whether the project was viable. When we talked about pushing the project into the future, the projections became more and more uncertain. But we finally came to an agreement of May 2020 and we think this is a suspension period which we can try to manage,” Khaw explained.

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Comments

  • ringgit is decreasing. cost of materials will be increased. why Malaysia always got morons to lead the country?

    Like or Dislike: Thumb up 28 Thumb down 7
    • Truckers on Sep 06, 2018 at 4:30 pm

      Leaders are elected amongst their peers. So if the current batch of leaders are morons, that means those who voted for them are also…

      Like or Dislike: Thumb up 20 Thumb down 4
      • maslan on Sep 06, 2018 at 6:06 pm

        I beg to differ a weak ringgit is good for tourism and exports.

        Like or Dislike: Thumb up 6 Thumb down 1
        • Spin Too Much on Sep 06, 2018 at 10:07 pm

          But nobody wanna come to a country that has flip-flop policies. One second they are welcomed, the next, they are called colonisers.

          Like or Dislike: Thumb up 11 Thumb down 2
    • Yeah, just like asking a fresh grad faster buy Civic now as by 2030 Civic it will cost more..

      Like or Dislike: Thumb up 3 Thumb down 0
      • With P3 coming in, that Civic might cost more than Accord currently. So in that sense, that fresh grad better fast-fast buy the Civic b4 it becomes totally unaffordable anymore.

        Like or Dislike: Thumb up 2 Thumb down 2
    • If you think you good why not go for election be part of them instead of shouting here!

      Like or Dislike: Thumb up 2 Thumb down 1
  • AutoFrenz (the original) on Sep 06, 2018 at 1:13 pm

    The govt that changed mind every alternate second..how can we trust them…so very pakatoon…like watching waltz disney cartoons

    Like or Dislike: Thumb up 32 Thumb down 6
  • Tricycle on Sep 06, 2018 at 1:18 pm

    Better to cancel Ecrl without reimbursement.

    Like or Dislike: Thumb up 1 Thumb down 7
  • Spin Too Much on Sep 06, 2018 at 2:23 pm

    Kejap want to cancel,
    Then want to continue with changes,
    Now want to postpone.

    Kejap say no penalty,
    Then say they not going to pay penalty,
    Now already paid penalty.

    Kejap they say can trust them,
    Then they break their promises & do Uturns,
    Now how to trust them?

    Like or Dislike: Thumb up 42 Thumb down 5
  • Semi-Value (Member) on Sep 06, 2018 at 2:33 pm

    didnt know henry thia is a minister now

    Like or Dislike: Thumb up 3 Thumb down 0
  • Syukur. Kena bayar rm45.1 juta saja. Nanti sambung 2031 harga pampasan hartanah, bahan mentah menjadi lebih murah. Inilah kerajaan terbaik!

    Like or Dislike: Thumb up 10 Thumb down 19
  • lilytan on Sep 06, 2018 at 3:58 pm

    Whats the logic behind this 2 years postponement? If we truly cant afford it, why not just scrap the project? Seriously, in just 2 years we can afford it meh? Postponement will only increase the cost in the future with our spiraling RM. On top of that we lose 45 mil to singapore for nothing.

    Like or Dislike: Thumb up 22 Thumb down 3
    • The PH government is hoping in 2 years time they can clear as much debt as possible, maybe down To 600 billion instead of over 1 trillion now. And perhaps by that time our economy will be stronger and better than today.

      Like or Dislike: Thumb up 4 Thumb down 1
    • stastasta on Sep 07, 2018 at 12:02 pm

      we cannot afford it at the moment after paying off ECRL and 1mdb debts, thats why we put HSR as lower priority. if you cannot afford something you defer the purchase. is this so difficult to understand ?

      Like or Dislike: Thumb up 4 Thumb down 1
  • transformer on Sep 06, 2018 at 5:16 pm

    this contract put MY at loss in the first place. why MY need to pay SG when also 98% rail in MY??? stupid BN Gov!

    Like or Dislike: Thumb up 7 Thumb down 17
  • Chris Lai on Sep 06, 2018 at 8:35 pm

    why our transport minister standing behind?

    Like or Dislike: Thumb up 1 Thumb down 2
  • Sean Liew on Sep 06, 2018 at 9:11 pm

    Just scrap the project. It is really not necessary and waste of funds. Just cut your losses and move on. PH is using it as a leverage for future undertaking.

    Like or Dislike: Thumb up 3 Thumb down 0
  • Dont forget to increase water price to singapore aswell, then its fair.

    Like or Dislike: Thumb up 1 Thumb down 0
  • If the new Government thinks the project is not viable and a waste, just cancel it and improve the existing lines.
    Postponing the project means they agree that the project is important for the long term.
    Another thing – POSTPONE, CANCEL, DEFER, all means the same thing to the new Government. It means U-Turns and flip flop decision making.

    Like or Dislike: Thumb up 4 Thumb down 0
    • stastasta on Sep 07, 2018 at 2:00 pm

      if your car is old and you need to buy a new car, but cannot afford it at the moment. you defer the purchase to a later date. is this so hard for you to understand ?

      Like or Dislike: Thumb up 0 Thumb down 0
  • Bernard on Sep 13, 2018 at 7:01 pm

    Singapore always win. They never lose to Bolehland.

    Like or Dislike: Thumb up 0 Thumb down 0
 

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