Malaysia pays token high-speed rail compensation

Malaysia has paid Singapore US$15 million to cover the costs of the delayed Kuala Lumpur-Singapore high-speed rail (HSR) project.

Singapore’s Ministry of Transport confirmed the payment after the amount was established last September when the neighbours agreed to suspend the project.

Malaysian Prime Minister Mahathir Mohamad said he wanted to ditch the HSR after reviewing several mega projects and the RM1 trillion (S$329 billion) national debt.

However, a suspension was opted for as cancellation would have entailed a heavier compensation bill under the bilateral rail agreement. If it happens, HSR is due to open in 2031, rather than 2027, as previously planned.

The four-year delay was officially due to the extra time needed by both countries to call fresh bidding and carrying out further technical work.

Mahathir has made it clear that the previous administration of Najib Razak was insufficiently transparent in its bidding processes.

The 350km link hoped to cut travelling times between Kuala Lumpur and Singapore to 90 minutes, compared with more than four hours by road.

Excavations must be refilled for the site to be safe and re-excavated if the project resumed, increasing costs, Singaporean transport minister Khaw Boon Wan told MPs last year.

By August last year, Singapore said it had spent more than S$300 million on the project, including the costs to design the infrastructure and for land acquisition.

SG HSR, the Singaporean infrastructure company which is a subsidiary of the Land Transport Authority, hired many staff who had worked hard on the project, the minister added.

Other projects that met with the new Pakatan Harapan government’s disapproval are the East Coast Rail Line (ECRL) and trans-Sabah gas pipeline.

On Tuesday, Mahathir, 93, said that the country would be “impoverished” if it continued with the Chinese-sponsored ECRL. He has referred to other nations, like Sri Lanka and Pakistan, that have become heavily indebted to Beijing after taking on schemes in China’s extensive Belt and Road Initiative.

Malaysian relations with Singapore have fallen back to the hostilities associated with Mahathir’s previous years in power from 1981 to 2003. A maritime territorial dispute now threatens to destabilise the Straits of Malacca.

The dispute arose in October when Malaysia unilaterally extended the territorial boundary at the Johor Bahru Port, encroaching into what Singapore sees as its waters. The claim extends beyond the maritime border Malaysia declared in 1979 while it deployed three vessels to patrol the area using non-military force.

Singapore hoped to slice journey times to Kuala Lumpur. Picture credit: Wikimedia