The bilateral agreement on the Kuala Lumpur-Singapore High Speed Rail (HSR) project has been terminated after it lapsed on Thursday (31 December).
In a joint statement, Singapore Prime Minister Lee Hsien Loong and Malaysia Prime Minister Muhyiddin Yassin said that both countries were unable to reach an agreement on several changes proposed by the Malaysian government.
“Both countries will abide by their respective obligations, and will now proceed with the necessary actions, resulting from this termination of the HSR Agreement,” the joint statement read.
Prior to this, Malaysia and Singapore had reached an agreement in September 2018 to delay the project — which Malaysia wanted to cancel due to the high cost.
Singapore’s Ministry of Transport (MOT) in May last year confirmed that the HSR project will be deferred for another seven months for Malaysia to deliberate on proposed changes to the commercial and technical aspects of the project.
Following this, it was reported in November 2019 that Malaysia had proposed several changes to the infrastructure project, according to a spokesperson from MOT.
The MOT spokesperson told The Straits Times (ST) that Singapore “remains fully committed to fulfilling our obligations under the HSR Bilateral Agreement”.
“We will make our best efforts to conclude discussions with Malaysia by Dec 31, 2020,” the spokesperson added, noting that Malaysia “will bear the agreed costs incurred by Singapore in fulfilling the HSR Bilateral Agreement” should Malaysia decide to call off the project.
The spokesman’s statement came following a report by Malaysian media outlet Free Malaysia Today (FMT), in which sources said that among changes Malaysia intends to put forth include continuing the project without Singapore.
This would mean that the HSR line would have ended in Johor Bahru instead of connecting Kuala Lumpur to Singapore.
Then-Singapore Transport Minister Khaw Boon Wan disclosed in Parliament on July 2018 that Singapore had already incurred costs for the project, including for consultancies to design civil infrastructure, manpower to oversee the project and also land acquisition.
The cost was estimated to have gone over S$250 million by the end of May 2018.
Months later in October 2018, Mr Khaw told Parliament that Malaysia had agreed to reimburse Singapore an amount of S$15 million for abortive costs, which was to be paid by the end of January last year.
The HSR project was announced in 2010, with an estimated rail distance coverage of 350 kilometres between Singapore and Kuala Lumpur. It would have also minimised travel time to only 90 minutes as opposed to 11 hours by regular train.
A legally-binding bilateral agreement on the project was signed in Putrajaya in December 2016.
While Singapore had started working on the project, which included appointing a firm to design the infrastructure and calling an international joint tender with Malaysia for an assets company, the HSR project was suspended after a power transition following Malaysia’s 2018 general election.
The project was then extended twice until the contract lapsed yesterday on the final day of 2020.