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Report: M'sia spared RM500m penalty, HSR deferred for 2 years
Published:  Sep 1, 2018 3:18 PM
Updated: 3:31 PM

Malaysia and Singapore appear to have reached a compromise which will see Putrajaya being spared a RM500 million penalty for a two-year deferral of the Kuala Lumpur-Singapore High-Speed Rail (HSR) project, according to business weekly The Edge.

The report, which was also carried by its sister portal The Edge Property, said the deferral will be in effect until May 31, 2020.

Citing sources, it said the agreement was reached "in a spirit of good neighbourliness".

The source added that Singapore recognised the strain the project's construction could have on Malaysia's financial health.

The report said that the original agreement to build the HSR, which was signed in 2016, did not contain provisions for a postponement.

Malaysia would have faced up to RM500 million in penalties, had it decided to drop the project.

Pakatan Harapan, after taking over the government after the May 9 general election, had revealed the project could cost up to RM110 billion.

Economic Affairs Minister Mohamed Azmin Ali had been in negotiations with Singapore in the last month to reach a compromise.

Azmin, in a meeting with Singapore's Transport Minister Khaw Boon Wan on Thursday, had said they were inching closer to a "win-win deal".

Prime Minister Dr Mahathir Mohamad had accused the previous government of raking up a debt of up to RM1 trillion.

He had since embarked on an effort to pare down the country's debt, including postponing megaprojects and slashing government spending.

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