Former Malaysian PM Najib questions economic impact of cancelling high-speed rail project

Former Malaysian PM Najib questions economic impact of cancelling high-speed rail project

najib speaking at parliament
Former Malaysian prime minister speaking at the Dewan Rakyat. (Screengrab: Sumisha Naidu)

KUALA LUMPUR: Former Malaysian prime minister Najib Razak questioned the country's economic affairs minster Azmin Ali on Wednesday (Jul 18) about the economic impact of cancelling the Kuala Lumpur-Singapore high-speed rail (HSR) project.

Speaking at the first parliamentary debate since the new Pakatan Harapan government came into power in May, Najib asked the government to disclose the impact the project would have had on the economy and on jobs creation, arguing that the HSR was a project many people wanted. 

Azmin had said during the debate in the Dewan Rakyat that the HSR was very costly for a 350km rail link, with the government trying to trim down on debts and liabilities exceeding US$251 billion.

Malaysian Prime Minister Mahathir Mohamad also echoed similar sentiments when he first announced the scrapping of the HSR project in May. He claimed that the HSR deal, which was agreed on by the previous administration led by Najib, was expensive and would not benefit the country. 

On Wednesday, Azmin said his government's cost estimate for the project was RM110 billion (US$27 billion); a figure higher than the previous estimates. 

READ: Fate of high-speed rail rests on Malaysia, Singapore discussion: Azmin Ali

Najib, now an opposition MP, questioned the figure as international tenders for the project will only end in December. 

"The open tenders will be looked at and decided by both governments, which means that the exact cost of the project is not known as the tender is still open," he said. 

"When there are international tenders, it will be more competitive. We will have nations giving us loans at 0 per cent or 0.1 per cent interest rates. 

"So how did the government come to the conclusion that the project will cost RM110 billion?"

Azmin said Pakatan Harapan's figure took into account "hidden costs" not disclosed by Najib's government.


Azmin said that he will be visiting Singapore soon to discuss the future of the HSR, in response to a question by opposition leader Zahid Hamidi.

"I will lead a visit to Singapore in the near future to have a discussion to reach an agreement with the Singapore Government for a fair and just resolution while maintaining the long-standing diplomatic ties between Malaysia and Singapore," said Azmin. 

"I have informed this directly via a phone call to the Singapore Minister for Infrastructure and Transport Khaw Boon Wan on Jun 6."

"I do not want to exclude that possibility (of the HSR project continuing) but again, I'm not here to make any suggestions until and unless there's a consensus between both countries," he said, when asked by the media if the project could still be on the table.

Singapore has stated that it has not received any formal notification of Malaysia's plans to scrap the project. 

Based on preliminary estimates, the Singapore Government has spent more than S$250 million on the HSR project as of May this year.

A task force - consisting of the finance minister, Azmin, transport minister Anthony Loke and Attorney General Tommy Thomas - has been set up to study the agreement. 

"The Attorney-General has studied the contents of the bilateral HSR agreement signed on Dec 13, 2016 and gave his legal opinions, which I presented to the cabinet on Jul 11, 2018," said Azmin.

"The AG gave his view that this matter must be settled according to the law and via bilateral negotiations. Based on this advice, we are studying all options available.

"The bilateral agreement allows either party to terminate the agreement, subject to terms. I want to stress that any agreement must be fair and just for both parties."

(Additional reporting by Sumisha Naidu and Melissa Goh)

Source: CNA/aa