KL-Singapore HSR reaches final stop: What you need to know

Malaysia and Singapore have confirmed that the deal to build a high-speed rail (HSR) link has been terminated as the bilateral agreement between the two countries had lapsed on Dec 31, 2020.

Minister in the Prime Minister's Department (Economy) Datuk Seri Mustapa Mohamed explained that the COVID-19 pandemic has severely impacted the economy, and the terms of the Bilateral Agreement signed in 2016 are no longer viable.

He said the government has been exploring alternatives to reduce the cost of HSR which includes changes to the project structure, alignment and station design.

However, both countries have not been able to come to an agreement.

Malaysia is now exploring all possible options, including the viability of a domestic HSR project.

2013: Former Prime Minister Datuk Seri Najib Razak and counterpart PM Lee Hsien Loon agree to build a high-speed rail between Kuala Lumpur and Singapore.

2016: In July, both PM witnessed the signing of a Memorandum of Understanding for the HSR, followed by a legally binding bilateral agreement on the project in December 2016, paving the way for its implementation.

2017: Singapore's Land Transport Authority (LTA) announced the formation of a wholly-owned subsidiary, SG HSR to implement the project and build, own, fund and maintain the civil infrastructure in Singapore. While Malaysia’s MyHSR will undertake the projects in Malaysia. Both companies jointly appoint an assets company and an international operator for the project through an open international tender.

2018: New Malaysian Prime Minister Mahathir Mohamad says the country has made "a final decision" to drop plans for the HSR. He says the project would cost Malaysia RM110 billion and the country will not earn it a single cent. In July, he then said his government would look to negotiate with Singapore the deferment of the project.

Singapore and Malaysia then signed a new agreement to formally agree to postpone the construction of the HSR until May 31 2020. Under the deal, Malaysia agrees to reimburse Singapore $15 million by end-January 2019 for abortive costs incurred by the deferment of the mega project.

Under the new agreement also, the express service of the HSR was expected to start by Jan 1, 2031 instead of Dec 31, 2026.

Singapore’s transport ministry said Malaysia has to compensate for the costs incurred under the agreement.

According to a report by The Edge, Malaysia is set to pay RM300 million in compensation to Singapore for the termination and is looking to undertake the project without Singapore’s participation.

Former Prime Minister, Datuk Seri Najib Razak in his Facebook post said Malaysia is set to lose billions of ringgit for allowing the HSR contract to expire. He claims that the project will be replaced by the Kuala Lumpur-Johor Bahru Medium Speed Rail (MHSR) Project (KL-JB).