Singapore agrees to suspend construction of RTS Link at Malaysia's request
Malaysia will reimburse Singapore for the abortive costs incurred due to the suspension.
SINGAPORE: Singapore has agreed to suspend the construction of the Johor Bahru-Singapore Rapid Transit System (RTS) Link until Sep 30 at Malaysia's request. Malaysia will also reimburse Singapore for the abortive costs incurred - around S$600,000 - due to the suspension, Singapore Transport Minister Khaw Boon Wan said in a press conference with his Malaysian counterpart, Anthony Loke on Tuesday (May 21).
The suspension and reimbursement was formalised in a supplemental agreement signed between both governments on Tuesday.
Mr Khaw said that after several rounds of discussions, both sides reached a “mutually acceptable arrangement” on the way forward.
During the suspension period, Malaysia will decide if it intends to proceed with the RTS Link project as it is. Malaysia can also propose changes to the project scope, and Singapore will give any such changes due consideration, he added.
“We hope that the RTS Link project will resume at the end of the suspension period – either in its current form as prescribed in the RTS bilateral agreement or incorporating any project scope changes that both sides agree on during the suspension period,” Mr Khaw said.
If not, the project will be deemed to have been terminated by Malaysia, and Malaysia will reimburse Singapore for the costs incurred in fulfilling its RTS Link obligations until now, he said.
Commenting on the S$600,000 abortive costs, Mr Khaw said these are costs incurred by Singapore that cannot be recouped even if the project is restarted, such as the money spent on the construction site at Woodlands North.
Mr Loke revealed that the abortive costs must be paid by Jul 31.
If Malaysia decides to terminate the RTS Link project, Mr Khaw said the cost incurred by Putrajaya would be around S$66 million.
The RTS Link, which connects Bukit Chagar in Johor Bahru to Woodlands in Singapore, is expected to ferry up to 10,000 passengers per hour each way.
The project was meant to be completed by 2024, but is now behind schedule with Malaysia repeatedly delaying confirmation of its joint venture partner.
At the press conference, Mr Khaw said that the suspension of the project would set back the completion date by "a couple of years".
Asked if Malaysia plans to call off the project, Mr Loke said Putrajaya does not want to "jump the gun right now" and will use the next four months to discuss various options.
"We do not want to discount any possibility and I do not want to say that we will terminate the project ... We really hope that the project will proceed," said the Malaysian minister.
However, he noted that the cost of the project is a "major consideration". He said if the cost can be reduced, commuters will be able to enjoy more affordable fares.
Mr Loke also said that Malaysia wants to look at how the private sector can play a role in the project going forward.
BOTH SIDES RECOGNISE NEED TO ALLEVIATE CAUSEWAY CONGESTION
In a joint statement, both ministers said they recognised the "urgent need to alleviate traffic congestion at the Johor Bahru-Singapore Causeway" which facilitates about 300,000 crossings daily.
"Malaysia and Singapore will also continue to discuss other affordable and sustainable solutions to address traffic congestion at the border. We will also explore further initiatives, including the use of new technology for enhanced security and checkpoint efficiency," the statement said.
"The ministers noted the importance for both countries to establish cost-effective, efficient and sustainable transport interconnectivity, as it will foster greater people-to-people ties and generate shared economic and social benefits," it added.
Posting on his Facebook page, Mr Khaw said the suspension is a “temporary setback”.
“I remain optimistic that the project could resume in due course. The cross-border congestion is real and only a decisive project like the RTS can make a material difference to the current situation.”
READ: Singapore, Malaysia affirm commitment to cooperative and forward-looking bilateral relationship
According to a bilateral agreement signed in January last year, a joint venture company comprising Singapore’s SMRT and Malaysia’s Prasarana Malaysia should have been constituted by Jun 30 last year.
The joint venture company should also have been appointed as the RTS Link operator through a Concession Agreement with Singapore's Land Transport Authority and the government of Malaysia by Sep 30, 2018.
Both milestones were missed. Malaysia then asked for an extension until Mar 31, to confirm its joint venture partner.
Early last month, Putrajaya said it has requested for a further six-month extension from Singapore before making a decision on the RTS. This will enable the Malaysian government to examine several issues including the cost of implementing the project, said Mr Loke.
Singapore expressed understanding for Malaysia’s position and both attorneys-general were tasked to work out a supplemental agreement to give effect to the suspension, similar to the process for suspending the Kuala Lumpur-Singapore High-Speed Rail.