SINGAPORE: There has been no reply to Singapore’s diplomatic note sent on Jun 1 to seek Malaysia’s position on the High-Speed Rail (HSR) project even as costs incurred continues to rise quickly, said Transport Minister Khaw Boon Wan on Monday (Jul 9).

Mr Khaw said in Parliament that following numerous statements by Malaysian leaders, including Prime Minister Mahathir Mohamad, on the HSR project over the past two months, these suggest that Malaysia no longer intends to continue with the rail project linking its capital of Kuala Lumpur to Singapore.



The bilateral agreement signed in December 2016 is an international treaty to build a High-Speed Rail allowing travellers to commute from Jurong Lake District to the Bandar Malaysia development in KL in 90 minutes.

Singapore subsequently sent the diplomatic note to clarify Malaysia’s position on the matter but, to date, it has not received a reply.

“The public statements made by the Malaysian ministers, and Prime Minister Dr Mahathir himself, on the termination of the project have not been followed through with any official communications to us,” Mr Khaw said.

RISING COSTS



Thus, Singapore has been “left with no choice” but to continue with its end of the agreement, the minister added.

Based on preliminary estimates, the Government has spent more than S$250 million on the HSR project by the end of May this year, and this includes costs for consultancies to design the civil infrastructure, costs for dedicating manpower to oversee and deliver the project and costs for land acquisition, he said.

“This is actual money that has already been spent, our taxpayers' money,” said Mr Khaw.

“We can recover value for some of the expenditure, even if the HSR project does not proceed. But a significant amount which has been spent will be completely wasted expenditure if the project does not proceed.”

The Transport Minister added that in the month of June, Singapore incurred more than S$6 million costs for the project, while the same amount is expected for July. These costs will increase rapidly with time, with at least S$40 million more expected to be spent from August to the end of 2018 for ongoing manpower costs, operating expenses and contract costs, he added.

“It will be most unfortunate, if Malaysia has in fact decided to terminate, but delays in notifying us, because there will be further wasted expenditure,” Mr Khaw said.

He added that besides Singapore’s incurred costs, interested rail consortia from China, Japan and Europe, among others, have also spent money preparing their bids. Following the statements from Malaysia’s leaders, they have “sought urgent clarification” from both countries on the project’s status, he added.

COMPENSATION, NOT PENALTY

The minister also took the opportunity to stress that the HSR bilateral agreement signed is a “fair treaty” with equal rights and obligations on both sides. He also noted it was Malaysia that suggested the project and Singapore agreed as it was convinced of its benefits.

Mr Khaw said: “If the HSR project is terminated because of the actions of country A, then country A should compensate country B for expenses that have already been incurred by country B, in accordance with the bilateral agreement.

“It would not be fair for the taxpayers of one country to bear the cost of another country’s actions. Compensation is not a penalty imposed on the other country.

“Thus, should Malaysia cause the HSR project to be terminated, we will deal with the question of compensation from Malaysia for costs incurred by Singapore in accordance with the bilateral agreement and international law,” the minister said.

Dr Mahathir, in an interview with the Financial Times on May 28, said the HSR project will be dropped and Malaysia may have to pay “almost 500 million” as a “penalty” though he was unsure of the currency. He confirmed this in a press conference that same day.

Mr Khaw also pointed out that as the costs incurred by Singapore will add to the total amount of compensation, “it is in Malaysia’s own interest to officially inform us of its position on the HSR project early on to minimise the amounts involved”.

He had highlighted this to Economic Affairs Minister Azmin Ali when the latter called on him on Jun 6, during which the Malaysian minister suggested both countries’ officials meet to discuss the project. Mr Khaw said he agreed and asked for details on the scope of discussion and the Malaysia minister said he will send a letter on the details, but the latter “has yet to do so”.

“The Singapore Government will continue to press for official clarification from the Malaysian Government. There are appropriate processes at law in case Malaysia should wish to propose changes to the bilateral agreement, or to terminate it,” Mr Khaw said.

“These due processes should be followed. If the Malaysian government fails to provide an official response, then we cannot ignore the public statements made by the Malaysian ministers, and Prime Minister Dr Mahathir himself, on the termination of the project, and Singapore will act according to its rights.”