PETALING JAYA: Malaysia will not need to compensate Singapore for the indefinite period that the Kuala Lumpur-Singapore High-Speed Rail (HSR) project is put on hold, said Economic Affairs Minister Datuk Seri Mohamed Azmin Ali.
"The project is on hold indefinitely. Singapore has agreed. We are confident our economy will improve ... There is no need to pay compensation during this period," he told reporters at the sidelines of the Selangor legislative assembly sitting on Monday (Sept 3).
However, there will be a penalty to pay if the project is cancelled, he added.
Prime Minister Tun Dr Mahathir Mohamad had said previously the project might be postponed and not cancelled, considering Malaysia could not afford the compensation due to Singapore if the project was halted.
In December 2016, under the previous administration led by former prime minister Datuk Seri Najib Tun Razak, Malaysia signed the HSR bilateral agreement with Singapore.
The mega project was meant to cut travel time between the two cities and to spur economic growth.
The Straits Times reported that The Edge newspaper in its Sept 3 issue quoted sources as saying the compromise was reached "in a spirit of good neighbourliness", with Malaysia being spared from having to pay a RM500mil penalty for postponing the project.
According to the business publication, the 350km line will be deferred for two years, until May 31, 2020.Dr Mahathir's administration had initially expressed its desire to scrap the HSR project due to cost concerns after claiming that it had inherited more than RM1 trillion in debt from the previous Barisan Nasional government.