The “main concern” that led to the termination of the Kuala Lumpur-Singapore High-Speed Rail (HSR) project was Malaysia’s suggestion that the assets company (Assets Co) that was to manage the project be removed said Minister for Transport Ong Ye Kung on Monday (Jan 4). Mr Ong revealed this information during the first Parliament session of the year.
According to Mr Ong, Singapore has incurred more than S$270 million in costs for the project since 2013.
A joint tender for an assets company for the HSR project was called for in December 2017 by both Malaysia’s MY HSR and Singapore’s SG HSR.
Mr Ong informed Parliament that the assets company would be necessary to ensure both countries’ interests were protected. An Assets Co would also minimise the possibility of future disputes.
He noted that neither Malaysia nor Singapore had experience in running a high-speed rail line. Thus, it had been agreed that a “best-in-class industry player” would be appointed to act as an assets company. The selection of such an entity would be via an “open and transparent international tender”.
This company would have supplied the train system as well as operated the network. This company would also have been accountable to both countries.
Mr Ong said removing the assets company represented a “fundamental departure” from the bilateral agreement. Thus, such a proposal is not acceptable.
Malaysia then decided to allow the agreement to lapse, he added.
Why the need for an HSR
Responding to questions on the project’s viability, Minister Ong cited pre-covid air travel numbers as the reason. Mr Ong said air traffic between Singapore and Kuala Lumpur was the heaviest in the world before the pandemic. The KL-Singapore flight route was the busiest international flight route. Around 5 million passengers flew this route annually.
He pointed to the HSR project as being “viable, mutually beneficial and strategic for the long term”.
Former PM Najib Razak mirrors Singapore’s points.
Former PM of Malaysia, Najib Razak has chided the current Malaysian government. In a Facebook post, Najib cited Singapore Transport Minister Ong Ye Kung’s remarks that had proposed to remove an assets company that the two countries previously agreed on, adding that the Singaporeans were not happy with this move.
“They (PN) want to choose the contractor and vendors for the HSR train through direct negotiation without Singapore interfering with it.
In his post, he also claimed that this was a departure from his initial vision for both countries to be responsible for the construction of the railway to prevent possible abuse or irregularity.
Najib predicts that this would cost the Malaysian government “trillions” of ringgit in benefits by 2050. He also claims the Malaysian government has already selected the technologies involved. He claims they have named a “crony” private company as the leading contractor cum operating company without any tender.
MY Govt claims HSR cancelled due to Covid-19 pandemic.
Minister in the Prime Minister’s Department, Datuk Seri Mustapa Mohamed made a statement on the HSR project. He said the Covid-19 pandemic had affected the Malaysian economy badly. Thus, the reason for cancelling the HSR project.
He said the situation has forced the government to re-evaluate the HSR project.
Last Friday, Malaysia and Singapore issued separate statements to announce the HSR Bilateral Agreement’s automatic termination.