Singapore could not accept Malaysia’s proposal to remove the systems supplier and network operator of the Kuala Lumpur-Singapore high-speed rail (HSR) project, says Minister for Transport Ong Ye Kung, according to The Straits Times.
Ong told Parliament on Jan 4 that the proposal to do so was a “fundamental departure” from the original agreement.
The removal of AssetsCo, the assets company, was Singapore’s main concern in discussions over the proposed changes by Malaysia.
Ong made the statement in response to Workers’ Party MP for Sengkang GRC Louis Chua on the differences between both sides that led to the termination.
Ong noted that the service had to be a single train system operating between Singapore and Kuala Lumpur, and that they “agreed under the HSR bilateral agreement to appoint a best-in-class industry player through an open and transparent international tender to assume the role of the AssetsCo,” he said, as neither country has the expertise and experience in operating the HSR.
“Once appointed, the AssetsCo will supply the train system, operate the network, ensure that appropriate priority is given to cross-border HSR service vis-à-vis Malaysia’s domestic service, and be accountable to both Singapore and Malaysia,” he added.
AssetsCo is the centrepiece to Singapore, and is essential to “minimise the possibility of future disagreements and disputes over the long duration of the project, lasting decades,” said Ong.
The project was terminated after both Malaysia and Singapore failed to reach an agreement on Dec 31, 2020.
See: KL-Singapore HSR project terminated after both countries fail to reach agreement and Malaysia to go it alone with HSR project, pay RM300m compensation to Singapore — source
The bilateral agreement was inked in 2016 after three years of negotiations. Both sides signed a supplemental agreement in May 2018 at Malaysia’s request to suspend the construction of the project.
A second agreement was signed to extend the suspension to Dec 31, 2020.
The minister added that Singapore had spent some $270 million on the HSR project so far, lower than the earlier estimate of about $300 million provided by previous transport minister Khaw Boon Wan in 2018.
The lower figure came about as Singapore had managed to wind down contracts and manage activity at a low level, said Ong.
Malaysia’s Minister in the Prime Minister’s Department Mustapa Mohamed has said that Malaysia will honour its obligations. However, the compensation figure for the cancellation cannot be disclosed due to a confidentiality clause in the bilateral agreement.
“We are waiting for the cost details from Singapore, and once received, it will be scrutinised before being confirmed. The types of claims allowed have already been agreed upon,” said Mohamed in a Facebook post.
“However, my team and I will discuss with Singapore to get an agreement to share information on the amount of compensation after it is finalised,” he added.
