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Deferment of KL-Singapore HSR project a “fair arrangement”: Transport Minister Khaw Boon Wan

Despite having the option to decline Malaysia's request for a postponement of the Kuala Lumpur-Singapore High Speed Rail (HSR) project, Singapore's Transport Minister Khaw Boon Wan reasoned that opting for an alternative "that protects Singapore's interests while reasonably accommodating Malaysia's request" would be a better and "fair arrangement."

Speaking in Parliament on Monday (1 Oct) in response to questions from Members of Parliament regarding the postponement of the project, Mr Khaw said that despite the deferment not being without cost to Singapore, he believes that such an arrangement "shows that we can manage our bilateral ties on the basis of mutual respect, and resolve issues amicably in accordance with binding agreements and international law."

"However, in the spirit of bilateral co-operation, we decided to work out an alternative resolution to the problem, especially since Malaysia reassured us that it did want to resume the HSR project, albeit after a delay," he added.

Mr Khaw's projection for the continuation of the HSR project appears to be rosy.

The Transport Minister said: "Singapore looks forward to continue working with Malaysia to see through the HSR project.

"Both sides recognise the mutual benefits of the HSR project, which will bring both countries closer together by improving connectivity, deepening people-to-people ties, and catalysing further economic co-operation."

Last month on 5 Sep, a new agreement on the HSR was signed between Mr Khaw and Malaysian Minister of Economic Affairs Mr Azmin Ali.

Malaysia and Singapore have agreed to postpone the project for nearly two years until 31 May 2020, with Malaysia to pay S$15 million worth of compensation in abortive costs to Singapore by January 2019.

"We have to pay contract breakage costs to contractors for terminating ongoing contracts and to safely wind down operations for the duration of the suspension period,” he said.

“For example, ongoing excavation works cannot simply be abandoned, and they need to be safely wound down.

"The excavation must be backfilled to render the site safe, and re-excavated once the project resumes, increasing costs,” he elaborated.

A major stakeholder in the project, SG HSR — an infrastructure company and a wholly-owned subsidiary of the Land Transport Authority (LTA) — has already taken on board many employees who have worked hard on the project, he added.

As a solution during the suspension of the HSR project, said employees will be offered alternative job positions in the LTA.

"I thank them for their good work and dedication to this project.

"I am confident that they will continue to contribute in the LTA family, and to the HSR project if and when it resumes," said Mr Khaw.

The HSR express service is now scheduled to start by 1 Jan 2031 -- which is four years later than the original scheduled date of 31 Dec 2026 -- due to both countries needing more time to revive the project, including opening new tenders and adding extra technical work.

Mr Khaw stressed that even if Singapore had chosen to decline Malaysia's request to halt the project, and subsequently pursued compensation through legal rights upon termination, it would have been "fully in accordance with the bilateral agreement" that was signed between the two countries in Dec 2016.

Touching on Malaysia's request to discuss the future of the HSR during the deferment period, Mr Khaw said: "Singapore is open to such discussions. We are not obliged to accept automatically any proposals offered, but we will assess any proposals from Malaysia carefully and objectively."