MALAYSIA has paid S$102.8 million (RM320.27 million) to Singapore for costs incurred in the development of the Kuala Lumpur-Singapore High-Speed Rail (HSR) project, and in relation to the extension of its suspension.

The two countries reached an amicable agreement on the amount following a verification process by the Malaysian government.

This amount represents a full and final settlement in relation to the termination of the Bilateral Agreement on the HSR project on December 31, 2020, Malaysia’s Minister in the Prime Minister’s Department (Economy) Mustapa Mohamed and Singapore’s Transport Minister Ong Ye Kung said in a joint statement today.

Both countries remain committed to maintaining good relations and fostering close cooperation for the mutual benefit of the peoples of the two countries, the statement said. 

In December, The Malaysian Insight reported a source saying that compensation would amount to some RM300 million.

The project was signed in 2016 but frozen in 2018 after Pakatan Harapan (PH) won the general election. The new government had asked for and received a deferral of two years from Singapore, paying S$15 million for the favour.

The Perikatan Nasional government, which replaced PH in March last year, then asked for an extended deferment, which Singapore agreed to until December 31 last year.

Putrajaya made its decision not to go ahead with the bilateral project two weeks before the deadline. The plan now is to proceed with the rail link but with the track ending in Johor.

Ong in January revealed the main stumbling block to the project was Malaysia’s demand for the removal of the assets company AssetsCo, which would have supplied the train system and managed operations of the cross-border rail link for both countries.

Singapore demeaned Malaysia’s demand for the AssetsCo removal as unacceptable, as it was a “fundamental departure” from the project’s bilateral agreement.

The removal of the AssetsCo would result in each country tendering parts of the HSR on their own without any say by the other country on a project that affected both sides. – March 29, 2021.