MALAYSIA will pay S$15 million (RM45 million) as abortive costs to Singapore for deferring the High Speed Rail project until May 2020 said Azmin Ali.

The Economic Affairs Minister said the sum has to be paid by January 2019.

Malaysia and Singapore signed a HSR Bilateral Agreement to defer the 350km project linking Kuala Lumpur and Singapore in Putrajaya today.

Singapore’s Transport Minister Khaw Boon Wan said the sum was for contractors who had built-in clauses in their contracts in case of deferments.

“The decision to suspend the project will impact a number of stakeholders such as contractors and potential bidders,” said Khaw.

He added that the amount was arrived at after technical personnel from both countries met last week.

The second part of the reimbursement will only take effect if the project does not proceed as now agreed in May 2020, said Khaw.

Azmin described the negotiations as smooth.

“We originally wanted to postpone (the project) for between 3 - 4 years but Singapore only wanted one. But after discussions, we agreed that 3 - 4 years could be too long,” said Azmin after signing the HSR Bilateral Agreement in Putrajaya today.

“If the deferment is beyond two years, the cost will escalate, and after more negotiations we agreed to defer it until 2020,” said Azmin.

He said both countries met on August 27 and 28 to discuss the abortive costs of deferring the project.

“And, we agreed that Malaysia will pay Singapore S$15 million by January 2019,” he added.

Besides deferring construction for HSR till May 31, 2020, the new agreement has also extended the commencement of the HSR Express Service between Singapore and Kuala Lumpur to begin on Jan 1, 2031 instead of the original date of Dec 31, 2026.

Due to the length of the suspension, Singapore and Malaysia’s infrastructure companies, SG HSR Ptd Ltd and MyHSR Cooperation Sdn Bhd will be calling off the ongoing international joint tender for the project. – September 5, 2018.