ASIA: The project to develop a 350 km high speed line offering a 90 min journey time between Kuala Lumpur and Singapore has been terminated, the two governments have announced. The Malaysian government will now undertake a detailed study to explore the viability of a domestic high speed rail project.
A bilateral High Speed Rail Agreement to undertake the Kuala Lumpur – Singapore project was signed in December 2016, with opening envisaged for the end of 2026.
Following the election of a new government in Malaysia, in September 2018 the two countries agreed to suspend the project until May 31 2020. They then agreed a final extension until December 31.
The delays were intended to give the Malaysian government time to identify options for reducing the projected costs. State-owned project promoter MyHSR Corp appointed Minconsult to review changes to the infrastructure, alignment, stations and maintenance facilities, while Ernst & Young was selected to develop new business models, identify funding and financing options and revise ridership forecasts.
Following the review, the Malaysian government proposed several changes to the project structure, station design and alignment. This is understood to have included re-routing the line to serve Kuala Lumpur International Airport, sharing tracks with the existing airport express service.
‘The Covid-19 pandemic has severely impacted our country’s economy’, explained Mustapa Mohamed, Minister in the Economic Planning Unit of the Prime Minister’s Department. ‘The terms of the bilateral agreement signed in 2016 are no longer viable for Malaysia, given the current economic situation which has adversely affected Malaysia’s fiscal position.’
The minister said the original project structure would have required ‘substantial and long-term government guarantees’, while the proposed revised structure was expected to provide ‘flexibility in financing options, such as deferred payments, public-private partnerships and the possibility of accessing financing at favourable rates’.
Under the proposals, the start of the construction phase would have been brought forward by almost two years, to provide ‘a much-needed boost to our construction sector and its supporting ecosystem’, he added.
The two governments held several discussions about the proposed changes, with prime ministers Lee Hsien Loong and Muhyiddin Yassin holding a video conference on December 2 2020. However an agreement could not be reached, and the HSR Agreement therefore lapsed on December 31.
On January 4 Singapore’s Minister for Transport Ong Ye Kung said a particular issue had been Malaysia’s proposal to drop plans for the joint appointment of an asset company which would be responsible for designing, building, financing, operating and maintaining the rolling stock and railway systems, including the track, electrification, signalling and telecoms. Ong said this was a signficant change from what had been previously agreed.
In a joint statement on January 1 the two prime ministers said Malaysia and Singapore would abide by their obligations regarding the termination of the agreement. This will require Malaysia to compensate Singapore for costs incurred in fulfilling its obligations.
The prime ministers said both countries remained committed to maintaining good bilateral relations and co-operating closely in various fields including strengthening connectivity.
- The separate Johor Bahru – Singapore Rapid Transit System project is underway to develop a cross-border metro shuttle for local travel between Singapore and Malaysia. Singapore awarded the first major civil works contracts at the end of 2020, with construction expected to get underway this year for opening at the end of 2026.
