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Malaysia will look into negotiating the delay of the Kuala Lumpur-Singapore High-Speed Rail project, said Prime Minister of Malaysia Dr Mahathir Mohamad yesterday.

Speaking to reporters at the Malaysian Parliament on 19 July, he said that the decision to negotiate a deferment was made after “having studied it [Malaysia’s financial situation] and the implication of unilaterally discarding the contract”.

“When we looked at the financial situation of the country, we thought that we couldn’t go ahead (with the HSR),” he said.

“But having studied it and the implication of unilaterally discarding the contract, we decided we may have to do it at a later date, we may have to reduce the price. But reduction of the price is very difficult as far as we can make out. So it has to be deferred.”

Malaysia’s Minister of Economic Affairs, Azmin Ali said that he has made plans to meet Singapore’s Minister for Transport, Khaw Boon Wan, by the end of this month to discuss the status of the HSR agreement.

“We need to make a clear decision now. In the event we want to defer, the entire process needs to be reviewed; we can’t just slow it down, we have to either suspend it now or terminate it,” said Azmin.

He added that it is lawful for either party to want to terminate the agreement as stipulated in the agreement itself.

Azmin elaborated that Singapore is entitled to claim for compensation as a result of a termination, and that there is a formula provided in the contract to calculate the appropriate amount of compensation.

Speaking to reporters at the Malaysian Parliament, he said: “Everything. We will look and revisit all the terms and conditions in the agreement. Everything. The entire project needs to be reviewed.”

According to Singapore’s Coordinating Minister for Infrastructure and Minister for Transport, Singapore had sent Malaysia a diplomatic note on 1 Jun, seeking clarification on the HSR project.

No reply was made to the particular note.

However, the Malaysian government has informed Singapore that it will propose dates for a meeting by 31 Jul.

The HSR project, which will stretch approximately 350 kilometres long, was slated to be ready by the end of 2026.

It was predicted that the HSR will reduce the usual rail travel time between Singapore and Kuala Lumpur down to 90 minutes.

The project was first jointly introduced by Singapore’s Prime Minister Lee Hsien Loong and Malaysia’s then-premier Mohammad Najib Abdul Razak, during the rule of the previous Barisan Nasional government.

The HSR agreement was signed between Malaysia and Singapore in December 2016 by Singapore’s Coordinating Minister for Infrastructure and Minister for Transport, Khaw Boon Wan and Malaysia’s Minister in the Prime Minister’s Department, Abdul Rahman Dahlan.

However, Dr Mahathir unilaterally announced that the project will be scrapped altogether under the Pakatan Harapan government, in a review of several mega projects in a bid to scale down the nation’s debts and liabilities amounting to RM1 trillion, as a part of the coalition’s election manifesto.

To date, Singapore has spent approximately S$250 million on the project.

Speaking to the Singapore Parliment on 9 Jul, Khaw stated that Singapore continues to bear ongoing costs on the project, with expenditure expected to hit some S$300 million by year-end, and warned that a “significant” amount of the funds spent would be “completely wasted” in the event of the cancellation of the HSR project.

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