Transport Minister Explains Why SG-KL High-Speed Rail Was Cancelled

You should’ve heard by now that the Singapore-KL High-Speed Rail has been officially cancelled.

Other than the massive disappointment, one other thing you’re wondering about is what exactly happened?

Is Malaysia really kicking Singapore out of the agreement because they’re making it into a JB-KL HSR instead?

Well, wonder no more because, on 4 Jan 2020, the first day of school reopening, Transport Minister Ong Ye Kung took to the podium to explain what exactly happened.

Transport Minister Explains Why SG-KL High-Speed Rail Was Cancelled

Previously, it was reported that Malaysia had proposed some amendments to the agreement in view of the economic impact of Covid-19.

Both countries had worked hard to negotiate on the proposed changes but failed to reach an agreement by 31 Dec 2020, leading to it lapsing.

Minister Ong revealed that the “main concern” that led to the cancellation was Malaysia’s suggestion to remove the assets company.

The Assets Company

Because neither Malaysia nor Singapore has any experience in running a high-speed rail line (it’s the first in Southeast Asia, after all), both countries have agreed to engage a “best-in-class industry player” to come in and act as the assets company.

The company would supply the train system, as well as operate the network, and would have both countries’ interest protected and minimise future dispute.

By removing the assets company, it would “fundamentally” depart from the agreement and is unacceptable on Singapore’s side.

Malaysia then allowed the agreement to be terminated, the minister added.

It wasn’t revealed, however, why Malaysia had suddenly wanted to remove the assets company.

Payback

Thus far, Singapore has spent approximately S$270 million on the project, and as previously stated by Minister Ong’s ministry, Malaysia will have to reimburse Singapore the cost.

While he can’t go into details for confidentiality reasons, the amount that Malaysia has to pay back includes:

• Abortive costs for:
  • consultancy services
  • design of infrastructure
  • manpower
• Abortive costs incurred due to project suspension requested by Malaysia

Land acquisition costs, on the other hand, will not be charged since it can be recovered, he adds.

Now, Malaysia can approach Singapore with any new proposal for the SG-KL HSR, Minister Ong said, and they’ll start with a “clean slate”.

Impact On Jurong

If you’ve bought a home in Jurong because you heard about the SG-KL HSR and you hear all the ka-ching in your mind, don’t worry.

Jurong’s still a pretty good place to be at.

After all, Jurong is going to become the second CBD of Singapore and there are little changes to the Jurong Lake District plans.

Here’s what Minister Ong has to say about the Jurong Lake District, even without the HSR:

“This will be the largest commercial and regional centre outside of our city centre, bringing many jobs, business and recreation opportunities for Singaporeans and Singapore companies.”

Yes, you can keep dreaming ka-chings for now.

The lands that were bought by the government will still be used, with the former site of Jurong Country Club for new mixed-use developments and community facilities, while the former site of Raffles Country Club will be used as an integrated train testing centre and the future Cross Island Line western depot.

The JB-Singapore cross-border train service is progressing well too, he added.

Featured Image: aapsky / Shutterstock.com