KUALA LUMPUR: Malaysia has agreed with Singapore to postpone the development of the Kuala Lumpur-Singapore High-Speed Rail (HSR) project by two years, reported Malaysian media.
Business weekly The Edge cited sources which said that both countries agreed to postpone the project to May 31, 2020, to allow Malaysia time to review its finances.
Malaysian Economic Affairs Minister Azmin Ali confirmed on Monday (Sep 3) that the project will be pushed back at no penalty, and that details will be made clear when a new agreement is signed soon.
"Singapore has agreed with the Malaysian government's view to delay the implementation of this project until a period when the economy has recovered," he said.
But when asked how long the project will be deferred, Azmin said: "We have agreed to a reasonable period."
He added that Malaysia did not have to pay any compensation to Singapore during the deferment period.
"No compensation will be paid within the deferment period. At the end of the deferment period, if it is cancelled, only then will we need to pay."
Malaysia remains committed to the project, said Azmin, adding that it would need to be more affordable.
"We want to continue with this project because it will bring good to both countries," Azmin said at an event, in a recording reviewed by Reuters. "However, over the course of the postponement we will discuss ways to reduce the cost," he said, adding that there was a possibility of adopting new technologies.
In response to media queries, Singapore's Ministry of Transport said both countries are currently in discussions on Malaysia's request to defer the HSR project.
"We hope to reach a mutually acceptable outcome soon,” said a ministry spokesperson.
Singapore's Transport Minister Khaw Boon Wan had said last week after a meeting with Azmin that both sides will announce their joint decisions on the project "soon".
On his part, Azmin said after the meeting that the two countries are "inching closer to a win-win deal".
The HSR is among several projects approved by the previous Malaysian government that are now being reviewed following the Pakatan Harapan's historic victory in the May general election.
Shortly after leading the coalition to victory, Malaysian Prime Minister Mahathir Mohamad declared his intention to cancel the HSR project, saying it would cost "a huge sum of money" and was not beneficial to Malaysia.
Mahathir said in July that his government would look to negotiate a deferment of the HSR instead, to reduce any burden of compensation.