MINISTER in the Prime Minister’s Department for economic affairs Datuk Mustapa Mohamed revealed that the fallout of the KL-Singapore high-speed rail (HSR) link project was due to the Government’s efforts to cut costs.
According to Mustapa, the Government explored various alternatives to reduce the cost of the project since 2018, as the original plans for the project would involve substantial long-term guarantees between the Malaysian and Singaporean governments.
More specifically, the new project structure would provide the Malaysian government with flexible financing options such as deferred payments, public-private partnerships and the possibility of accessing financing at favourable rates.
“The proposed changes to the project structure would have allowed us to leverage on the project to accelerate Malaysia’s economic recovery, by bringing forward the start of the construction phase by almost two years,” Mustapa clarified, adding that the aftermath of the COVID-19 only stressed the need for such measures to reduce costs.
However, with the project now scrapped altogether as both parties failed to reach to an agreement by the deadline of Dec 31, 2020, the minister said that the Government will now continue to explore other options, which includes the viability of a domestic high-speed rail project.
The Malaysian government is still planning to uphold its promise of repaying Singapore for the costs that have already been incurred on the project so far. – Jan 1, 2021
