Malaysia and Singapore terminate agreement to build high-speed rail link

Singapore Prime Minister Lee Hsien Loong

SINGAPORE/KUALA LUMPUR (Reuters) - Singapore and Malaysia said on Friday a deal to build a high-speed rail (HSR) link between the two neighbours will be terminated, after a suspension period to negotiate terms of the long-delayed project expired on Dec. 31.

First announced in 2013, the project linking Kuala Lumpur to Singapore has been estimated by analysts to cost around $17 billion.

It was suspended in 2018 shortly after former Malaysian prime minister Mahathir Mohamad came to power with a pledge to tighten finances and review major deals made by his predecessor Najib Razak.

In May, the suspension was extended another six months to allow discussion of changes to the project.

Malaysia had proposed several changes to the project but was unable to reach an agreement with Singapore on them, according to a joint statement from Malaysian Prime Minister Muhyiddin Yassin and Singapore Prime Minister Lee Hsien Loong.

"Both countries will abide by their respective obligations, and will now proceed with the necessary actions, resulting from this termination of the HSR agreement," said the statement, released by Muhyiddin's office.

Separately, Singapore's transport ministry said Malaysia has to compensate it for costs incurred in fulfilling its obligations under the agreement.

The countries did not state how much Malaysia would have to pay.

Construction on the rail link had been scheduled to commence in May 2020, with operations to begin in January 2031.

Companies from China, Japan, South Korea and Europe had expressed interest in winning contracts to build, operate and finance the trains and rail assets, people close to the bidding process previously told Reuters.




(Reporting by Aradhana Aravindan in Singapore and Rozanna Latiff in Kuala Lumpur; Editing by Kim Coghill)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel