Singapore says has spent over S$250m on HSR, significant sums will be ‘completely wasted’ if project cancelled

Khaw said that, should Malaysia decide to terminate the HSR project, both nations will have to address the issue of compensation from Malaysia in accordance with the HSR bilateral agreement and international law. — TODAY pic
Khaw said that, should Malaysia decide to terminate the HSR project, both nations will have to address the issue of compensation from Malaysia in accordance with the HSR bilateral agreement and international law. — TODAY pic

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SINGAPORE, July 9 — The Republic has spent more than S$250 million (RM743.4 million) on the high-speed rail (HSR) project as of May this year, revealed Transport Minister Khaw Boon Wan in Parliament today.

He added that since a significant amount has been spent, it will be “completely wasted expenditure if the project does not proceed”.

Despite sending a diplomatic note to Malaysia on June 1 to seek clarification on its position on the HSR project, Singapore has yet to receive a reply, Khaw added.

“At this point therefore, we have been left with no choice but to continue performing in accordance with the bilateral agreement, and thus continue to incur more costs,” he said.

He pointed out that Singapore expects to incur more than S$6 million for the month of July, with these costs set to “increase rapidly with time”, adding that the country will need to spend at least S$40 million more from August to end-December 2018.

The amount of money that has been spent thus far covers the costs for consultancies to design the civil infrastructure, costs for dedicating manpower to oversee and deliver the HSR project, and costs for land acquisition, said Khaw.

“This is actual money that has already been spent, our taxpayers money. We can recover value for some of the expenditure, even if the HSR Project does not proceed,” said Khaw.

“But a significant amount which has been spent, will be completely wasted expenditure, if the project does not proceed.”

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.”

Pointing out that it was Malaysia that had suggested building the HSR and Singapore agreed to the joint project, Khaw said that, should Malaysia decide to terminate the project, both nations will have to address the issue of compensation from Malaysia for costs incurred by Singapore in accordance with the HSR bilateral agreement and international law.

“It would not be fair for the taxpayers of one country to bear the cost of another country’s actions,” said Khaw.

“The Singapore Government has a duty to all Singaporeans to be accountable for the substantial public funds spent on the HSR Project.”

Weeks after Malaysia’ new Pakatan Harapan government was elected on May 9, the country’s new Prime Minister Tun Dr Mahathir Mohamad said his government has decided to scrap the HSR project in an attempt to reduce the country’s burgeoning financial debt.

But Dr Mahathir reportedly said later that his government intends to postpone the project and will speak to their Singapore counterparts.

Saying that the costs that Singapore have incurred 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, to minimise the amounts involved”, said Khaw.

The issue has been raised to Malaysia’s Economic Affairs Minister Dato’ Seri Mohd Azmin Ali, who called Khaw on June 6 , with the Malaysian official suggesting that both parties meet to discuss the project.

“I welcomed the suggestion. I asked him for details on the scope of the discussion so that the meeting could be productive. He agreed and promised to send me a letter on the details. He has yet to do so,” said Khaw.

Aside from the costs incurred by Singapore, rail consortia from China, Japan, Europe and other interested parties such as international financial institutions, have also been incurring costs because they prepared bids for the HSR Assets Company tender, jointly launched by Singapore and Malaysia last December.

Khaw said the companies have sought urgent clarification on the status of the HSR project, adding that it is not tenable for them to proceed with their bids without knowing “if the project is off, or to put their consortia and resources on hold indefinitely with the attendant opportunity and financing costs”.

Saying that Singapore “will continue to press for official clarification” from the Malaysian government, Khaw reiterated that there are due legal processes should Malaysia propose changes to the agreement or terminate it.

“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,” said Khaw.

“And Singapore will act according to its rights.” — TODAY

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