M'sia wanted to avoid 30-year RM60bil guarantee involving HSR project, says Mustapa

PETALING JAYA: Malaysia wanted to avoid a 30-year RM60bil guarantee under the revised changes to the recently cancelled Kuala Lumpur-Singapore high-speed rail (HSR) project, says Datuk Seri Mustapa Mohamed.

"Several intensive discussions at the technical and ministerial levels were held over the past six months.

"Our Prime Minister and the Prime Minister of Singapore also held a video conference on Dec 2,2020.

"Unfortunately, we were unable to reach an agreement.

"As an individual who has been directly involved in the two-way discussions over the last six months, I wish to stress that we did what was best to safeguard the nation's interests," the Minister in the Prime Minister's Department said in a Facebook post on Monday (Jan 4).

He added that among the proposed changes put forth by Malaysia were a new and neater project structure based on HSR models in Europe, the UK, Japan and South Korea.

"The proposed new structure would also avoid the government having to give a RM60bil guarantee for a 30-year period.

"Apart from this, it would have also provided us with more flexibility in financing the project," he added.

Mustapa also said Malaysia had proposed changes to the alignment and station design, which would have further reduced the project cost by 30%.

"Another factor that was considered was the possibility of starting the project two years ahead of time.

"This would have assisted in speeding up Malaysia's economic recovery post-Covid-19, particularly for the construction industry," he added.

Despite the failure to reach a consensus on the proposed changes, Mustapa noted that discussions were done in an amicable and constructive manner with both countries looking at strengthening close ties.

He explained that the bilateral agreement with Singapore to develop the HSR project was signed in 2016 but the project was put on hold by the previous administration in May 2018 for a review.

However, with the emergence of Covid-19, he said the current government was forced to find ways to reduce the cost of several mega projects while ensuring economic recovery after the global pandemic.

"These developments resulted in the original terms, which were signed under bilateral agreements in 2016, no longer being viable for Malaysia," he said, adding that Singapore agreed in May last year to allow Malaysia to defer the start of the project to the end of 2020.

On the issue of compensation to Singapore, Mustapa said he could not divulge details as the exact sum has yet to be determined.

"I wish to stress that compensation is not punitive in nature but is for repayment of specific project costs which were expended by Singapore.

"We are waiting for the cost details from Singapore and once received, it will be thoroughly looked at before being verified," he added.

Although bound by confidentiality under the bilateral agreement, Mustapa said he will discuss with Singapore about allowing information on the compensation to be shared once finalised.