UPDATE: M'sia, S'pore agree to delay HSR to May 31, 2020, M'sia to pay RM45.1m

PETALING JAYA (Sept 5): Malaysia and Singapore have agreed to delay the Kuala Lumpur-Singapore High-Speed Rail (HSR) until May 31, 2020 , inking legal documents to amend the initial HSR Bilateral Agreement to that effect, reported The Malaysian Insight.

Singapore’s Transport Minister Khaw Boon Wan and Malaysia’s Economic Affairs Minister Datuk Seri Mohamed Azmin Ali signed the documents in Putrajaya today, witnessed by Prime Minister Tun Dr Mahathir Mohamad, Deputy Prime Minister Datuk Seri Dr Wan Azizah Wan Ismail and Singapore’s Deputy Prime Minister and Coordinating Minister for National Security Teo Chee Hean.

Under the deal, Malaysia will bear the costs for suspending the project and also costs incurred by Singapore for fulfilling the HSR Bilateral Agreement if the project fails to commence by May 31, 2020.

Putrajaya will bear the cost of RM45.1 million (S$15 million) to Singapore as part of the deal, which must be paid by end of January next year.

During this period, both countries will try to reduce the cost of the project, which Malaysia has projected will reach RM110 billion.

Both countries have also agreed to postpone the commencement of the HSR Express Service to Jan 1, 2031 from the initial Dec 31, 2026.

As a result of the postponement of the project, SG HSR Pte Ltd and MyHSR Cooperation Sdn Bhd will stop the international joint tender for the project.

At a joint press conference with Khaw, Azmin said that this was the outcome from discussions by officials from both countries on Aug 27 and 28.

"Both parties have met on Aug 27 and 28 to discuss every detail, every single item, and finally both parties agreed that the cost needed to be paid by Malaysian government amounting to about S$15 million, and that need to be paid before end of January 2019, so we still have some space," The Edge Markets reported Azmin saying.

"In the event we cancel the project, certainly we will meet and discuss, but I do not want to jump to the conclusion because the agreement signed today clearly stated our commitment to continue with the project, after May 2020," Azmin said.

"The negotiations have been very frank and thorough between Minister Khaw and myself, as well as officials from both sides. We all worked tirelessly to bring about a resolution that is mutually beneficial.

"When I first met Minister Khaw on Aug 11, I presented that we would like the project to be postponed [for] at least three to four years, based on the prevailing economic condition in Malaysia," he said.

"I am glad that Minister Khaw and the team view our position positively. Then when we met again in Kuala Lumpur a week later, Minister Khaw came back with [the] position that Singapore [is] willing to consider a period of one year. Certainly I need to discuss again with the Cabinet, before I went back to Singapore to appeal to our friends in Singapore to consider a longer period.

"I agree with Minister Khaw that if the deferment period is beyond two years, the business model would change, and the cost would continue to escalate, so based on our negotiations via various meetings, we agreed to two years of deferment period," Azmin added.