Malaysian government has remitted ‘abortive costs’ for HSR postponement

The Singapore government has announced on Thursday (31 January) that it has received confirmation from the Government of Malaysia through diplomatic correspondence that it has remitted to the Government of the Republic of Singapore the payment for abortive costs incurred by Singapore in suspending the Kuala Lumpur-Singapore High Speed Rail Project.

The deal came after a formal agreement between the two countries to postpone the construction of the HSR until end-May 2020 as requested by Malaysia’s government resulted to Malaysia has to pay Singapore S$15 million for costs incurred to suspend the project.

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.

Speaking during Parliament sitting on 1 October last year, the Minister of Transport Khaw Boon Wan stressed that 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.

Speaking on the matter, Ministry of Transport (MOT) spokesperson said, “We have received confirmation from the Government of Malaysia through diplomatic correspondence that it has remitted to the Government of the Republic of Singapore the payment for abortive costs incurred by Singapore in suspending the Kuala Lumpur-Singapore High-Speed Rail Project.”

Pakatan Harapan administration is currently relooking the country’s finances after winning the May general election, therefore, the HSR along with other mega projects approved by the previous Malaysian government, such as the East Coast Rail Line (ECRL) and trans-Sabah gas pipeline, has come under review.