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S'pore: No reply to June 1 diplomatic note on HSR, cost balloons

Published:  |  Modified:

Putrajaya has not responded to Singapore's diplomatic note sent on June 1 regarding the Kuala Lumpur-Singapore High-Speed Rail (HSR) project, the republic's Transport Minister Khaw Boon Wan told Parliament today.

The note inquired about Malaysia's position on the project as Singapore continues to incur costs.

As reported in Channel News Asia, Khaw said statements by Malaysian leaders, including Prime Minister Dr Mahathir Mohamad, suggested that Putrajaya is not keen on continuing with the project.

“The public statements made by the Malaysian ministers, and Mahathir himself, on the termination of the project, have not been followed through with any official communications to us,” he added.

Due to this, Khaw said Singapore is “left with no choice” but to continue with its end of the agreement.

Citing preliminary estimates, the minister said Singapore had spent more than S$250 (RM774.19) million on the project as of the end of May this year.

This, he pointed out, included costs for consultancies to design the civil infrastructure, costs for dedicating manpower to oversee and deliver the project, and costs for land acquisition.

“This is actual money that has already been spent, our taxpayers' money.

“We can recover value for some of the expenditure, even if the HSR project does not proceed. But a significant amount which has been spent will be completely wasted expenditure if the project does not proceed,” he added.

Khaw said for the month of June, the cost incurred was more than S$6 million and the same is expected for July.

The cost, he noted, would increase rapidly with time, with at least S$40 million more expected to be spent from August to the end of 2018 for ongoing manpower costs, operating expenses and contract costs.

“It will be most unfortunate if Malaysia has in fact decided to terminate, but delays in notifying us, because there will be further wasted expenditure,” he added.

Compensation sum will increase with delay

Apart from Singapore, Khaw said interested rail consortia from China, Japan and Europe, among others, have also spent money preparing their bids.

In the wake of the statements from Malaysian leaders, he said these consortia have “sought urgent clarification” from both countries on the project's status.

“If the HSR project is terminated because of the actions of country A, then country A should compensate country B for expenses that have already been incurred by country B, in accordance with the bilateral agreement.

“It would not be fair for the taxpayers of one country to bear the cost of another country’s actions. Compensation is not a penalty imposed on the other country.

“Thus, should Malaysia cause the HSR project to be terminated, we will deal with the question of compensation from Malaysia for costs incurred by Singapore in accordance with the bilateral agreement and international law,” he added.

Khaw said that since the cost incurred by Singapore would add to the total amount of compensation, “it is in Malaysia's own interest to officially inform us of its position on the HSR project early on to minimise the amounts involved”.

Azmin promised to send a letter

The minister said he had impressed this upon Economic Affairs Minister Azmin Ali when the latter called on him on June 6.

Khaw said Azmin suggested that officials from both countries meet to discuss the matter, to which he agreed and requested for details on the scope of the discussion.

To this, he said Azmin told him that he would send a letter on the details but “has yet to do so”.

“The Singapore government will continue to press for official clarification from the Malaysian government.

"There are appropriate processes at law in case Malaysia should wish to propose changes to the bilateral agreement, or to terminate it.

“These due processes should be followed. If the Malaysian government fails to provide an official response, then we cannot ignore the public statements made by the Malaysian ministers, and Mahathir himself, on the termination of the project, and Singapore will act according to its rights,” he added.

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