Economic Affairs Minister Mohamed Azmin Ali said when he first met Singapore Transport Minister Khaw Boon Wan on Aug 11, he had presented a mandate from the Cabinet that they would like the project to be delayed by three to four years, because of the economic situation in Malaysia.
Azmin said when both of them met again in Kuala Lumpur, Khaw came back with the position that Singapore was willing to only consider a suspension of a year.
“I told him I needed to discuss this with the Cabinet. I went back to Singapore to appeal to them to consider a longer period.
“I am glad he viewed our position positively. I certainly agree with Khaw that if the deferment period is beyond three years, the business model will change and the cost will escalate.
“So, based on our negotiations and previous meetings, the deferment will be until May 31, 2020,” Azmin said at a press conference after the signing of a supplementary agreement between him and Khaw.
The exchange of documents was witnessed by Prime Minister Dr Mahathir Mohamad and Singapore Deputy Prime Minister Teo Chee Hean.
Khaw expressed hope that the HSR project would be able to continue after the suspension period. He pointed out that the distance between both countries is almost 400km, which was a “sweet spot” for the high-speed rail link.
“Many Singaporeans have actually been looking forward to the realisation of the project and we remain committed to it.
“But, of course, we understand why Malaysia needs to suspend the construction of the HSR project. Even though the HSR bilateral agreement has no provision for a project suspension, in the spirit of bilateral ties, Singapore has given Malaysia’s concerns serious consideration.
“So, after several rounds of discussions with Azmin, we have reached a fair agreement on the way going forward. Today’s exchange of documents formalises the agreement on the suspension, which will be until May 31, 2020,” he said.
Khaw said if the project does not resume after the suspension period is over, it will be deemed terminated.
Malaysia will then reimburse Singapore for the wasted costs the city state has incurred in fulfilling their end of the HSR obligations.
“The decision to suspend will impact stakeholders, for instance, contractors and potential bidders. So, today’s announcement will help clarify the situation.
“We thank the companies for their active participation in the project so far. I certainly hope to be able to work with them in future,” he said.
Khaw further explained that a year’s suspension would be manageable for the city state, but pointed out that if it was for a longer period, say four years, the situation will be quite different.
“From Singapore’s point of view, there is a limit as to how long we can postpone the project. Of course, it increases the risk of costs,” he added.