Malaysia will pay Singapore about S$15 million (US$10.88 million) by end-January 2019 for the deferment, its economic affairs minister, Azmin Ali, said at a news conference in Kuala Lumpur. It would be liable to pay more if the project does not resume in two years.
Singapore and Malaysia have agreed to defer the construction of the planned high-speed rail link between the two countries until 2020, ending months of uncertainty surrounding a project that analysts expect to cost US$17 billion.
In a joint statement, both countries have agreed to suspend construction for a period up to May 31, 2020, and will look for ways to reduce costs, Reuters reported.
Malaysia will pay Singapore about S$15 million (US$10.88 million) by end-January 2019 for the deferment, its economic affairs minister, Azmin Ali, said at a news conference in Kuala Lumpur. It would be liable to pay more if the project does not resume in two years.
“By end of May 2020, we hope to see the resumption of the high-speed rail construction,” Singapore transport minister Khaw Boon Wan said. “If not, the project would be deemed to have been terminated and Malaysia would reimburse Singapore for the wasted cost that we have incurred.”
In July, Singapore said it would seek to recover more than S$250 million in costs incurred to date should Malaysia cancel the project.
The 350-kilometre link, which will connect Kuala Lumpur and Singapore, is scheduled to commence services by January 2031 if construction starts by May 2020. It was originally expected to begin operating in December 2026.
The joint tender process will now be called off. Previously, companies from China, Japan, South Korea and Europe have expressed interest in winning contracts to build, operate and finance the trains and rail assets.