Malaysia compensated Singapore $102.8m for costs from terminated HSR project

Staff Writer, Singapore
·Editorial Team
·3-min read

SINGAPORE — Malaysia has compensated Singapore $102.8 million for costs incurred in the terminated Kuala Lumpur-Singapore High-Speed Rail (HSR) project, both governments said in a joint statement on Monday (29 March).

"The payment of SGD102,815,576.00 (RM320,270,519.24) has been made by the government of Malaysia to reimburse the government of the Republic of Singapore for costs incurred for the development of the HSR project, and in relation to the extension of suspension of the HSR project," said the statement signed off by Singapore's Minister for Transport Ong Ye Kung and Malaysia's Minister in the Prime Minister’s Department (Economy) Mustapa Mohamed.

The amount represents a full and final settlement in relation to the termination of the bilateral agreement, it added.

On 4 January, Ong said in Parliament that Singapore had incurred more than $270 million for the project and received so far about $15 million arising from Malaysia’s request to suspend construction of the project in 2018.

The two countries "reached an amicable agreement" on the amount following a verification process by the government of Malaysia, the joint statement said.

"Both countries remain committed to maintaining good relations and fostering close cooperation for the mutual benefit of the peoples of the two countries," it added.

Artist impression of the HSR terminus in Jurong East by Farrells. (Source: LTA)
Artist impression of the HSR terminus in Jurong East by Farrells. (Source: LTA)

In a post on his Facebook page, Ong also spoke about the settlement, saying he is glad both countries are able to close this chapter amicably, without affecting the good bilateral relations.

"Looking ahead, there are many areas that we have opportunities to cooperate on. These include the issues Minister Vivian Balakrishnan discussed with leaders in Malaysia last week, such as the restoration of some air travel, which the MOT (Ministry of Transport) will be very involved in, and also commuting via the Causeway," he said.

In response to media queries, an MOT spokesperson said that the $270 million that Singapore has spent on the project includes land acquisition cost.

"Because Singapore Government can recover value from the land we acquired, we are not seeking compensation for it. For example, one piece of land acquired will be used to develop the Integrated Train Testing Centre, which broke ground recently," the spokesperson said. 

For the final compensation amount of $102 million, the bulk of it was computed when Singapore acceded to Malaysia’s request to suspend the project, and was stipulated in the HSR agreements, the spokesperson added.

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Singapore and Malaysia signed the HSR agreement in 2016, during the government of ex-Malaysian Prime Minister Najib Razak.

Construction of the rail network was later suspended from September 2018 to 31 December last year, at Malaysia’s request.

The agreement lapsed on 31 December after both sides were unable to reach an agreement on the proposed changes to the HSR project. Singapore's transport ministry announced the next day that the project had been terminated.

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