Comment: The suspension of the KL-S’pore HSR project ends today. What will M’sia decide? – Mothership.SG

It is New Year’s Eve and Singaporeans are getting ready to put 2020 behind them.

But there’s one piece of unfinished business that remains between Singapore and Malaysia.

The High-Speed Rail (HSR) project between Singapore and Kuala Lumpur, Malaysia is a project that’s been going on for about a decade.

It was officially agreed upon by Prime Ministers Lee Hsien Loong and Najib Razak in 2013.

Malaysia has gone through two changes of government since then, but the HSR has managed to survive the upheaval. However, its time may be running out.

What is the HSR?

Imagine a high-speed train running from northern Malaysia to Singapore, like the ones in China or Japan.

One could step onto a train in Singapore and step off in Kuala Lumpur just 90 minutes later.

The line would include other stops at places like Melaka and Seremban.

Photo by Seloloving via Wikimedia Commons.

According to an ISEAS-Yusof Ishak Perspective piece in 2016, the HSR was portrayed as a “game-changer” for both countries.

Ticket prices were expected to cost around S$55 and S$60, cheaper than the cost of a flight.

It noted that the Causeway, the main link between the countries is frequently congested and overused, and the distance between KL and Singapore is ideal for operating a HSR.

The link would spur on greater economic integration, especially for labour mobility and cross-border services, while encouraging development in both the Bandar Malaysia and Jurong East areas.

Timeline of the project

1990s — The idea for HSR was floated, but nothing concrete happened due to high costs.

2010 — The government of then-Prime Minister Najib Razak introduced the Economic Transformation Programme Roadmap, which laid out priority areas for development.

Among the proposals was deploying a high-speed rail system to connect Greater Kuala Lumpur/Klang Valley and Singapore.

2013 — Following the Singapore-Malaysia Leaders’ Retreat, Najib and PM Lee announce the formal agreement to build the HSR.

2016 — The governments of both countries sign a Memorandum of Understanding on the HSR. The announcement mentions:

“The MOU will guide the development of a legally-binding Bilateral Agreement to be signed by both Governments towards the end of this year.

It also reiterates the Governments’ commitment to ensure that all project tenders are conducted in an open, fair and transparent manner, so as to encourage participation from technology and service providers worldwide.”

2017 — In December, MyHSR Corp and SG HSR (the two companies responsible for HSR development within their own borders) call for a joint tender for an Assets Company (AssetsCo).

“The AssetsCo will be responsible for designing, building, financing and maintaining all rolling stock, as well as designing, building, financing, operating and maintaining all rail assets (e.g. trackwork, power, signalling and telecommunications) for the Kuala Lumpur-Singapore HSR.

The AssetsCo will also coordinate the system’s network capacity for operations and maintenance needs.”

The tender was open to companies around the world, with an emphasis on safety, security and reliability.

A historic election

Then came a curveball.

In May 2018, the Pakatan Harapan coalition ousted the Barisan Nasional coalition from power for the first time.

Mahathir Mohamad became Prime Minister once more, replacing Najib Razak.

And just a few days after assuming power, Mahathir declared that all projects would be reviewed with an eye to monetary costs.

In September later that year, Singapore and Malaysia agreed to suspend construction of the HSR to 2020, pushing back to expected completion date from 2026 to 2031.

In the joint statement, the following points were made:

  • Both countries remain committed to the HSR.
  • At Malaysia’s request, Singapore has agreed to suspend the construction of the HSR Project up to 31 May 2020.
  • Malaysia will bear the agreed costs in suspending the HSR.
  • If by 31 May 2020, Malaysia does not proceed with the HSR Project, Malaysia will also bear the agreed costs incurred by Singapore in fulfilling the HSR Bilateral Agreement.

In response to Parliamentary questions, then-Transport Minister Khaw Boon Wan said that Malaysia would pay S$15 million in costs for suspending the project.

Guess who’s back?

2019 came and went, and 2020 was upon us. But all was not well in the Pakatan Harapan camp.

After a truly stunning series of events, Mahathir resigned the Prime Ministership, Pakatan Harapan fell from power, Bersatu cleaved in two and one faction joined with Barisan Nasional and PAS to form a new government.

When the dust settled, Muhyiddin Yassin of Bersatu emerged as the new Prime Minister and was sworn in back in March.

But if observers thought that the removal of Pakatan Harapan from power would see a swift resumption of the HSR, they were wrong.

In May 2020, both countries agreed to an extension of the suspension period of the project.

The request for the extension was made by Malaysia.

Then-Transport Minister Khaw said:

“In the spirit of bilateral cooperation, we have agreed to a final extension of the suspension period to 31 December 2020. This should provide sufficient time for Malaysia to clarify its proposal and for both sides to assess the implications of the proposed changes.”

Senior Minister Azmin Ali, who was previously Economic Affairs Minister in the Pakatan Harapan government, said the two governments will resume discussions on the HSR “in the near future” and they will encompass proposed changes in the commercial and technical aspects of the project.

Rumours and rumblings

While there has been little public announcements since then, rumours began to circulate in the Malaysian media that the HSR could go on, but without Singapore’s involvement.

Free Malaysia Todayciting unnamed sources, said on Nov. 25 that Muhyiddin had decided to resume the HSR but having it end in Johor, and exclude Singapore entirely.

Those sources criticised the decision, as Johor and KL are already linked by a flight and an expressway. In addition, Malaysia is planning to build an electric rail link between the two places.

A HSR link that will only end in Johor will therefore be redundant.

In response to queries from Mothership, Singapore’s MOT provided this statement:

“Singapore and Malaysia signed the Kuala Lumpur – Singapore High Speed Rail (HSR) Bilateral Agreement in December 2016. This is a legally binding international agreement which remains in force today.

The construction of the HSR Project has been suspended twice at Malaysia’s request with the second and final extension ending on Dec. 31, 2020. During the suspension period, Malaysia has proposed some changes to the HSR Project, and we have been discussing them in good faith with Malaysia.

Singapore continues to believe that the HSR Project is beneficial for both countries, and remains fully committed to fulfilling our obligations under the HSR Bilateral Agreement. We will make our best efforts to conclude discussions with Malaysia by Dec. 31, 2020.

However, if by Dec. 31, 2020, Malaysia does not proceed with the HSR Project, under our agreements with Malaysia, Malaysia will bear the agreed costs incurred by Singapore in fulfilling the HSR Bilateral Agreement.”

Compensation fee if project is dropped

The Prime Minister’s Office released a joint statement on Dec. 2, saying that Muhyiddin and PM Lee discussed the issue and will release an update in due course.

On Dec. 13, the Malaysian Insight reported that Malaysia would indeed cut Singapore out of the HSR, and pay Singapore a compensation fee of RM300 million (S$100 million).

On Dec. 24, the Edge Markets reported the same thing.

Today is the last day of the suspension period, which was extended at Malaysia’s request.

One way or another, we’ll find out the final fate of the project tomorrow, the first day of 2021.

Top image from MYHSR YouTube channel.