Kuala Lumpur-Singapore High Speed Rail project terminated; Malaysia has to compensate Singapore for costs incurred

They fail to agree on Malaysia's proposed changes; both countries commit to maintaining ties

By Tham Yuen-C, Senior Political Correspondent, The Straits Times, 2 Jan 2021

The twice-delayed high-speed rail (HSR) project between Singapore and Malaysia will no longer go ahead, after both countries were unable to reach an agreement on changes proposed by Malaysia.

The termination of the agreement was announced by Prime Minister Lee Hsien Loong and his Malaysian counterpart, Tan Sri Muhyiddin Yassin, yesterday, and came amid recent rumours that Malaysia had decided to build the line alone.

Negotiations hit an impasse after Malaysia proposed changes due to the economic impact of the Covid-19 pandemic.

In their joint statement, the prime ministers, who had spoken via videoconference on Dec 2, said: "Both governments had conducted several discussions with regard to these changes and had not been able to reach an agreement. Therefore, the HSR agreement had lapsed on Dec 31."

Malaysian Minister in the Prime Minister's Department Mustapa Mohamed said yesterday that his government had wanted to bring forward the construction phase and also proposed a new project structure which would have provided more financing options.

He added that Malaysia will honour its obligations and both countries will initiate the necessary procedures to determine the amount of compensation.

PM Lee and Mr Muhyiddin also said: "Both countries remain committed to maintain good bilateral relations, and cooperate closely in various fields, including strengthening the connectivity between the two countries."

The writing was on the wall after Malaysian news reports in recent months suggested that the Malaysian Cabinet was planning to continue on its own and end the line in Johor instead of Jurong.

Yesterday's statements did not detail the compensation amount that Malaysia has to pay Singapore.

Singapore's Transport Ministry said that as Malaysia allowed the agreement to lapse, it will have to compensate Singapore for costs already incurred.

Based on earlier estimates, Singapore had already spent more than $250 million for design, manpower and land acquisitions by the end of May 2018, then Transport Minister Khaw Boon Wan told Parliament in July that year.

He also said Singapore would continue to incur costs - over $6 million each month in June and July, and at least $40 million from August to the end of 2018.

When Singapore agreed to Malaysia's request for a suspension in August that year, more costs were incurred to compensate contractors for breaking contracts, and to fill back sites already excavated, for instance. Malaysia had agreed to reimburse Singapore $15 million for these abortive costs.

The 350km rail line, which Malaysia mooted and both sides agreed to build in 2013, was to have run from Bandar Malaysia in downtown Kuala Lumpur to Jurong East.

It would have had seven stations, and would have cut travel time between Kuala Lumpur and Singapore, one of the busiest air routes.

The trip would have taken 90 minutes on the HSR, compared with over four hours by car and about five hours end to end by air.

Singapore commenced work on the project, appointing a firm to design infrastructure and calling an international joint tender with Malaysia for an assets company, after both countries signed a legally-binding bilateral agreement in December 2016.

The project was put on hold following a change in the Malaysian government in May 2018. The two-year suspension was set to expire in May last year and extended for a second and final time till Dec 31.

The latest development has come under criticism by some in Malaysia, among them former prime minister Najib Razak, who said yesterday that a domestic line was not economically viable.

Meanwhile, observers do not expect a significant impact on bilateral ties, saying that the joint statement indicates a mutual agreement was reached on the termination.

Johor Bahru-Singapore Rapid Transit System Link Project gets green light; operations expected to begin at end-2026

The light rail transit system will improve connectivity and ease Causeway congestion
By Lim Yan Liang, The Straits Times, 31 Jul 2020

Singapore and Malaysia officially resumed the project for the cross-border Rapid Transit System (RTS) Link between Woodlands and Johor Baru with a ceremony to mark the occasion, one day ahead of a final deadline following multiple postponements.

Not surprisingly, it will get rolling later than planned - service is targeted to start end-2026 - with several changes woven in. The RTS, for example, will now be a light rail transit (LRT) system.

Prime Minister Lee Hsien Loong said in a Facebook post yesterday evening that the RTS Link would improve connectivity and ease congestion along the Causeway when it is ready.

"So it was apt that we marked this milestone with a bilateral ceremony at the Causeway, which has connected our two countries for almost a hundred years."

PM Lee, along with Malaysian Prime Minister Muhyiddin Yassin, witnessed the ceremony at which Transport Minister Ong Ye Kung and his Malaysian counterpart Wee Ka Siong marked the official resumption of the project.

The 4km line, previously slated to be operational by end-2024, will connect passengers between Johor's Bukit Chagar terminus station and the Singapore terminus in Woodlands North. The Customs, immigration and quarantine facilities will be co-located so passengers have to clear immigration only once, at the point of departure.

Both countries also reaffirmed their commitment to ensuring the rail link is well-integrated with local transport networks. The Singapore terminus is at Woodlands North on the Thomson-East Coast (TEL) MRT Line, which will serve 32 stations from Woodlands to Bedok by 2024.

Several key changes have been made to the project.

The RTS Link will now be a standalone LRT system, instead of using the same trains and systems as Singapore's TEL. As a result, the RTS Link will no longer use the existing TEL depot at Mandai. A new depot will be built in Wadi Hana, Johor Baru. The cross-border link's capacity remains unchanged at up to 10,000 passengers per hour in each direction.



A spokesman for the Ministry of Transport said that the project would use an LRT system similar to that of a medium-capacity MRT system in Singapore and it would be capable of meeting the peak capacity of 10,000 passengers an hour, in each direction.

Separately, Malaysia has changed its infrastructure company (InfraCo) to a wholly owned subsidiary of Mass Rapid Transit Corporation. The Land Transport Authority remains as Singapore's InfraCo.

The rail link is expected to bring relief to the Causeway, which 300,000 people used to cross daily before the pandemic struck.

The signing turns the page on a project which was agreed to by leaders of both countries a decade ago, but has seen several delays.

Both countries signed a binding agreement to build the link in January 2018, but key project deadlines were missed after the Pakatan Harapan coalition led by former prime minister Mahathir Mohamad came to power in Malaysia less than five months later.



The deadline to come to new terms was subsequently pushed back four times at the request of Malaysia. The last suspension, to the end of this month, was due to factors such as COVID-19 and Malaysia's change of government.

Asked if he was confident that the RTS Link would begin ferrying commuters by 2026, Mr Ong said: "We work with whatever government is in charge and we also, as a country, deeply respect and abide by the agreements (we sign) and I'm sure our partner countries are the same."



PM Lee said in his Facebook post: "The pandemic has shown how deeply entwined our two countries are. Even in these difficult times, we continue to work together, and look forward to doing still more together."

9th Singapore-Malaysia Leaders' Retreat on 9 April 2019

Prime Minister Lee Hsien Loong, Mahathir affirm commitment to cooperative and forward-looking bilateral relationship
Singapore and KL to begin maritime boundary talks within a month
By Royston Sim, Deputy News Editor (Politics) In Putrajaya, The Straits Times, 10 Apr 2019

Singapore and Malaysia will begin negotiations to delimit their maritime boundaries in a month, as both countries have taken steps to de-escalate tensions at sea.

This measure was one of several that Prime Minister Lee Hsien Loong and his Malaysian counterpart Mahathir Mohamad welcomed at their Leaders' Retreat yesterday, the first under the Pakatan Harapan government.

Speaking at a joint news conference, PM Lee said he and Tun Dr Mahathir affirmed their commitment to a cooperative and forward-looking bilateral relationship.

"The relationship between our two countries is rooted in our long history, and strong family and business ties," he said. "This remains unchanged even with the new Malaysian government."

The leaders also discussed current bilateral issues, including airspace and maritime boundaries.

Dr Mahathir said: "We agreed that the fundamental principle is to resolve issues of concern in a friendly and constructive manner."

Both PMs welcomed the progress made in implementing recommendations to resolve the maritime dispute. Dr Mahathir said: "As the saying goes, good fences make good neighbours. We will now proceed to maritime boundary delimitation in the area."

Ultimately, Malaysia believes it is important to delimit all outstanding maritime boundaries between Malaysia and Singapore, he added.



Malaysia and Singapore had mutually suspended the extension of their overlapping port limits on Monday, reverting to what was in place before Oct 25 and Dec 6 last year, respectively.

Earlier yesterday, a Singapore Foreign Ministry spokesman said there were no Malaysian government vessels anchored in the area previously covered by overlapping port limits as of midnight. "We will continue to exercise sovereignty and take appropriate enforcement actions in the area," he said.

Dr Mahathir also said at the news conference that Malaysia wants to take back control, in stages, of its airspace over southern Johor that has been delegated to Singapore.

PM Lee said Singapore is willing to discuss this matter with Malaysia, and stressed the key considerations include the safety and efficiency of air traffic operations.

On water, Dr Mahathir said resolving the issue of the price of water sold to Singapore under the 1962 Water Agreement is a priority.

Singapore, on its part, is concerned about pollution of the Johor River as well as its long-term yield, PM Lee said.



Beyond these bilateral issues, the broader Singapore-Malaysia relationship continues to grow, PM Lee said. For instance, the Joint Ministerial Committee on Iskandar Malaysia is working to further cooperation on multiple fronts.

PM Lee also invited Dr Mahathir and his wife Siti Hasmah Mohamad Ali to this year's Bicentennial National Day Parade at the Padang on Aug 9. Dr Mahathir said he was glad to accept the invitation.

Then Malaysian Deputy Prime Minister Abdul Razak and his wife had attended the National Day celebrations in 1969, on the 150th anniversary of modern Singapore's founding.

Asked if the recent maritime and airspace disputes will have lasting damage to bilateral ties, PM Lee said: "If it is managed well, then it can be productive for both countries and the overall relationship can prosper. If it is not managed well, it can cause a lot of trouble and poison the overall relationship."

PM Lee said he wrote a letter to Dr Mahathir in December as he was worried that things were not going in the right direction. He asked Deputy Prime Minister Teo Chee Hean and Finance Minister Heng Swee Keat to deliver it in person and explain his concerns to Dr Mahathir.

PM Lee said he is very happy that Dr Mahathir took in what they said and took action, which enabled ministers from both sides to meet and turn things around gradually.



In a Facebook post last night, PM Lee said issues will crop up from time to time between close neighbours bound by history and kinship.

"When this happens, we need to keep channels of communication open, build trust, and tackle the issues pragmatically and with an eye to both sides' concerns. Then we can move beyond solving problems to cooperating for mutual benefit," he said.

Singapore student takes on Mahathir at Oxford Union dialogue session on 18 Jan 2019

Darrion Mohan presses Malaysian Prime Minister on disputes between the 2 countries
The Sunday Times, 20 Jan 2019

A Singapore student at Oxford University took on Malaysian Prime Minister Mahathir Mohamad last Friday, asking the elder statesman candid questions on the prickly diplomatic relations between the two countries.

Mr Darrion Mohan, a second-year history and politics undergraduate, began by saying that Singapore and Malaysia were "again embroiled in an unnecessary and potentially internecine maritime dispute", referring to the Johor chief minister's recent intrusion into waters off Tuas.

He then asked Tun Mahathir, who had earlier given his address at Britain's prestigious debating society, the Oxford Union, if any action would be taken against the chief minister.

"Would you not agree actions like this contribute to the perception that your government is pugnacious, that your government acts in bad faith and that your government... wants a return to the days of confrontational diplomacy and barbed rhetoric?" he asked.

Dr Mahathir did not immediately answer Mr Mohan's questions, and instead asked if he was a Malaysian.



Mr Mohan then sought to bring the discussion back to the issues he raised, listing the Singapore-Kuala Lumpur high-speed rail project, the airspace dispute over Seletar Airport, the proposed "crooked" bridge between Johor Baru and Singapore, calls to revise water supply prices and the maritime dispute as indicators that Dr Mahathir wanted a return to the "fraught relations with Singapore" seen during his first stint as premier between 1981 and 2003.

Dr Mahathir responded by saying that the 1962 Water Agreement between the two countries was unfair to Malaysia.

Singapore pays 3 sen (1 Singapore cent) per 1,000 gallons for its supply of raw water from Johor, and sells treated water back to Johor at 50 sen per 1,000 gallons. It costs Singapore RM2.40 to treat every thousand gallons of water. By selling at 50 sen, Singapore is providing a subsidy of RM1.90 per thousand gallons of water.

On the maritime dispute, Dr Mahathir confirmed that "the Menteri Besar went without our permission", adding that "he thought it was Johor waters, that's why he went there".

However, Dr Mahathir said Singapore's reaction to the intrusion was quite severe, "as if you are going to war", and described the waters off Tuas as international waters. "It is not Singapore water either, it is international water and the Menteri Besar can go into international water without Singapore sending warships to chase him away," he said.

Despite his questions not being fully addressed, Mr Mohan graciously surrendered the microphone to someone else to ask questions, but not before clarifying that the waters were not neutral and were Singapore's according to a 1979 map that Malaysia had tabled.



Dr Mahathir was later asked if he believed it was right for Malaysia to expel Singapore in 1965. Singapore merged with the Federation of Malaya, Sarawak and Sabah in 1963 to form the Federation of Malaysia. Singapore left the federation in 1965.

"But the fact is that Singapore was a part of Malaysia before. It is our country," he said. "Normally, when a country decides to decolonise, the land goes back to the owner of that land, to the country that owns that land, that happened to Hong Kong and Macau and other places."

Dr Mahathir added: "But in our case, we find that people in Singapore are not compatible with the people in Malaysia. They have a different viewpoint, different ideas about how a country should be ruled, so it is for that reason that they were asked to leave Malaysia, and I think it was a wise decision at that time."

Singapore one of first countries I will visit as Prime Minister: Anwar Ibrahim at Singapore Summit 2018

Singapore-Malaysia ties have been historically strong but need constant care, he says
By Lim Ai Leen, Assistant Foreign Editor, The Sunday Times, 16 Sep 2018

Malaysian politician Anwar Ibrahim said yesterday that Singapore will be one of the first countries he visits when he becomes prime minister, stressing that the two countries need to forge strong bonds.

The de facto leader of the ruling Pakatan Harapan (PH) coalition was asked to comment on bilateral relations between the neighbouring nations at a conference here.

"Singapore-Malaysia relations... Ada problem ke? (Is there a problem?)," he remarked, drawing laughter from hundreds of business and thought leaders at the Singapore Summit 2018.

Datuk Seri Anwar, who was released from prison in May after receiving a royal pardon, is set to succeed Prime Minister Mahathir Mohamad in two years, as agreed by the PH leadership before May's general election.



Last week, Mr Anwar's Parti Keadilan Rakyat announced he would contest a by-election in Port Dickson, paving the way for him to return to Parliament. "If and when I assume the premiership, then I will make sure that one of the first countries I visit will be Singapore," he declared at the dialogue yesterday.

Singapore's Prime Minister Lee Hsien Loong posted a photo on Facebook of his meeting with Mr Anwar yesterday. "Glad he is spending some time with our academic institutions, meeting Singaporeans, building bridges, and strengthening ties between our countries," said PM Lee. He also wished Mr Anwar well for the upcoming by-election.

In the four months since PH's historic win at the ballot box, Malaysia has deferred the Singapore-Kuala Lumpur High-Speed Rail project and raised the prickly issue of how much it charges to supply water to Singapore, indicating the price should be raised tenfold.

Mr Anwar noted yesterday that it was not sensible to create problems between the two countries.

He said that while Tun Dr Mahathir was firm on some of these contracts, "it was confined to that particular problem and we try to resolve it on a bilateral basis, proceed with negotiations..."

In his first public appearance in Singapore since his release from jail, the seasoned statesman played to the crowd with his trademark mix of fiery rhetoric, literary quotes and jokey asides. He even apologised for stumbling over some words in his speech, explaining: "In prison, I only spoke Malay."



He recalled that on one of his visits to Singapore - before he was sacked as deputy prime minister by Dr Mahathir in 1998 - he told Singapore's Emeritus Senior Minister Goh Chok Tong, who was then prime minister, that Singaporean leaders were too serious.

"You know, Singapore and Singapore leaders are too serious and business-like. We (Malaysians) tend to, you know, cultural sikit (a little)... relax sikit, give and take sikit. Singapore - (it's) dollars and cents," he said.

A month later, he said Mr Goh invited him to a performance by renowned tenor Luciano Pavarotti.

"He took my words seriously," Mr Anwar exclaimed as Mr Goh, who was in the audience, laughed.

Mr Anwar also stressed that relations between Singapore and Malaysia have been historically strong but need constant care.

He singled out, as an example, PM Lee's visit to Putrajaya soon after PH won the election. "It was very cordial and it was a very (good) gesture for the PM to be the first to come and visit. I think these signals are important because this goes beyond just diplomatic encounters or business deals."

KL-Singapore High-Speed Rail postponed to May 2020; Malaysia to pay Singapore RM45 million for suspending project

Singapore, KL sign deal to defer high-speed rail; service targeted to start by January 2031, four years longer than first planned

Singapore has already spent $250 million on the project - some of which can be recovered - but Malaysia will have to bear the agreed costs incurred by Singapore should the project be terminated.
By Charissa Yong, Regional Correspondent In Putrajaya, The Straits Times, 6 Sep 2018

Singapore and Malaysia yesterday signed an agreement to defer the Kuala Lumpur-Singapore High-Speed Rail (HSR) project for about two years.

This stoppage - for up to May 31, 2020 - will mean that the HSR express service will now take four years longer than originally envisaged to start rolling.

Instead of the trains starting to ply on Dec 31, 2026, they will now do so only on Jan 1, 2031, if all goes to plan.

"By the end of May 2020, we hope to see the resumption of the high-speed rail construction," Coordinating Minister for Infrastructure and Minister for Transport Khaw Boon Wan said yesterday.

"If not, the project will be deemed to have been terminated, and Malaysia will reimburse Singapore for the wasted costs we have incurred fulfilling our HSR obligations till now."

Meanwhile, the ongoing joint tender for an assets company to operate the 350km line has been called off .

Under the deal, Malaysia has agreed to reimburse Singapore $15 million for abortive costs incurred by the deferment of the mega project, which has had a question mark over its future since Malaysia elected a new government in May.

This payment is due by the end of January next year.

"Many Singaporeans have actually been looking forward to the realisation of this project, and we remain committed to this project. But of course we understand why Malaysia needs to temporarily suspend the construction of the HSR project," said Mr Khaw, adding that the negotiated outcome was fair.



Asked why a two-year delay means trains start running four years later, the Ministry of Transport said both countries need additional time to implement the project after it resumes, including calling fresh tenders and carrying out extra technical works.

Malaysian Prime Minister Mahathir Mohamad initially planned to scrap the HSR when he took over as he reviewed mega projects to reduce the country's RM1 trillion (S$332 billion) debt.

However, he later said his administration would negotiate a delay as a cancellation would entail a large compensation under the pact.

Since then, officials from both sides have been in "intense negotiations", said Malaysian Economic Affairs Minister Mohamed Azmin Ali, who inked yesterday's deal with Mr Khaw.



Datuk Seri Azmin said Malaysia had initially asked for a much longer postponement, while Singapore had offered a shorter one, before both sides eventually agreed to push it back by two years.

Mr Khaw said in a Facebook post: "Many will be disappointed by the delay, but at least there is now greater clarity on the way forward for this mega project."

The line between Kuala Lumpur and Jurong East is estimated to cut travel time to 90 minutes, compared with more than four hours by car.

Singapore has already spent $250 million on the project - some of which can be recovered - but Malaysia will have to bear the agreed costs incurred by Singapore should the project be terminated.

But there will be no further deferments, Foreign Minister Vivian Balakrishnan told reporters later.

On the abortive costs of suspending the project, Mr Khaw cited how work is already under way to divert utilities for the HSR, which will run mostly underground in Singapore.

These projects cannot simply be dropped, he noted.



In a separate interview, Deputy Prime Minister Teo Chee Hean said the agreement was a positive, balanced outcome that addressed Malaysia's financial concerns by giving it the opportunity to think about what it wanted to do with the HSR, while safeguarding Singapore's financial interests.

"It reflects the commitment of both Malaysia and Singapore to want to proceed with bilateral relations in a positive way," he said.

Mahathir Confessions: Pakatan Harapan made promises without expecting to win General Election 2018

Malaysia PM Mahathir Mohamad's first 100 days back in power
Pakatan made pledges without expecting to win polls: Mahathir
The Straits Times, 17 Aug 2018

PETALING JAYA • Malaysian Prime Minister Mahathir Mohamad has said that Pakatan Harapan (PH) made too many election promises because it did not expect to win the 14th general election in May.

The coalition chairman told PH and Parti Warisan Sabah MPs at a closed-door meeting in Petaling Jaya on Monday night that this was why the new administration was facing a tough time meeting its manifesto pledges.

Tun Dr Mahathir also warned about the possibility of a backlash against the new government, according to several sources present at the dinner function.



"Actually, we did not expect to win, and we made a thick manifesto with all kinds of promises... We need to make sacrifices to fulfil our promises. If we can't fulfil them, we will need a good reason that is acceptable to the people," said Dr Mahathir.

"If we fail to deliver on our promises, the opposition will use it against us and we may be defeated" in the next general election, he added.

One example he gave was PH's promise to make the position of opposition leader equal to that of a minister.

The Prime Minister said that the promise was made with the expectation that PH would be in the opposition.

"But we won, and now it feels uncomfortable to give the opposition leader an equal rank to a minister," he said.

Mahathir says Singapore should pay at least 10 times more for Malaysian raw water in Associated Press interview on 13 August 2018

Singapore-Malaysia Water Agreements: Malaysia PM Mahathir Mohamad wants to raise price of raw water sold to Singapore by more than 10 times
The Straits Times, 14 Aug 2018

PUTRAJAYA • Malaysia's Prime Minister Mahathir Mohamad has said he wants to increase the price of raw water supply to Singapore by more than 10 times to reflect the higher cost of living.

The current water agreement, which expires in 2061, sees Singapore drawing up to 250 million gallons a day (mgd) of raw water from the Johor River, and Johor entitled to 5 mgd of treated water from Singapore.

Singapore pays 3 sen (1 Singapore cent) per 1,000 gallons of raw water and sells treated water back to Johor at 50 sen per 1,000 gallons. Singapore has said this price is heavily subsidised and below the cost of treating the water.

Malaysia chose not to review the price when allowed to in 1987, but talks took place when Tun Dr Mahathir, who was then prime minister, raised the issue in 1998. The talks did not result in a new pact.

In an interview with the Associated Press published yesterday, Dr Mahathir said Johor sells raw water to another Malaysian state Melaka at 30 sen per 1,000 gallons, which he described as "charitable".

"To a foreign country, we need to get more than that," he said.



Since his comeback as the world's oldest prime minister after leading the Pakatan Harapan (PH) coalition to victory in the May general election, Dr Mahathir has in recent interviews criticised the 1962 water deal as "too costly" and "ridiculous", and said Malaysia would approach Singapore to renegotiate the terms of the deal.

Dr Mahathir had served a previous stint as prime minister from 1981 to 2003.

Singapore's Ministry of Foreign Affairs (MFA) said last month that Singapore has been clear and consistent in its position that Malaysia lost its right to review the price of water under the 1962 Water Agreement in 1987.

The statement came as Malaysia's national news agency Bernama cited Malaysian Foreign Minister Saifuddin Abdullah as saying in an interview that "the agreement says the content of the agreement can be reviewed after 25 years".

MFA said Singapore's position was set out in Foreign Minister Vivian Balakrishnan's remarks in Parliament on July 9 where he said Dr Mahathir had noted in 2002 that Malaysia did not ask for a review when the water pact was due as it knew any revision would also affect the price of treated water sold by Singapore to Malaysia.

The water issue has been brought up on several occasions in Malaysia since the PH government took over.

Johor Crown Prince talks about High-Speed Rail, Water and Wonderful Relationship with Singapore

Malaysia should not scrap High-Speed Rail project with Singapore; Johor crown prince claims 'sovereignty' over water in the state, prefers ‘no federal interference’ on the issue
By Amir Yusof, Channel NewsAsia, 19 Jul 2018

JOHOR BAHRU: Malaysia should not withdraw from the Singapore-Kuala Lumpur High-Speed Rail (HSR) project, Johor crown prince Tunku Ismail Sultan Ibrahim told Channel NewsAsia in an exclusive interview on Thursday (Jul 19).

"I think it's a very, very positive project that we should continue because it will not only help Johor but also Singapore," he said.

"It will boost the economy in Johor, maybe to have more foreign investment coming in. The HSR is a very positive project that we should proceed and continue (with), that's my personal opinion."



However, he said whether to proceed with the project was "up to the government" of Malaysia.

"There's nothing I can do because at the end of the day it's between the governments," he said.

Malaysia Prime Minister Mahathir Mohamad first said in media reports in May that Malaysia intends to scrap the project which was agreed upon with Singapore by the former federal government.

However, Singapore has said that it has not received any formal notice of this from its neighbour. On Wednesday, Malaysia's Economic Affairs Minister Mohamed Azmin Ali said he will be discussing the issue with Singapore's Minister for Transport Khaw Boon Wan to find the best solution in the best interest of both countries.

Dr Mahathir on Thursday took a different stance, telling reporters the country may defer the project instead of scrapping it after studying the costs and implications of cancelling the project.

Parliament: Singapore responds to Mahathir's articulation on the High Speed Rail and Water Agreements

Singapore spent $250 million on HSR project, expects to spend another $40 million by December 2018, 'completely wasted expenditure' if project cancelled says Khaw Boon Wan

Singapore to seek RM743 million (and counting) compensation if HSR project cancelled



Singapore will honour 1962 Water Agreement and expects Malaysia to do the same, says Vivian Balakrishnan

Malaysia took a conscious decision not to revisit the price of raw water that it was selling to Singapore when it had the opportunity to do so in 1987, when the 1962 water agreement was up for review



Mahathir says Singapore knows what Malaysia wants to do with High-Speed Rail in latest public statement (but is refusing to confirm officially) on the termination of the project

* Mahathir says Singapore should pay at least 10 times more for Malaysian raw water in Associated Press interview on 13 August 2018

Singapore stands by its High-Speed Rail (HSR) and water pact obligations, says Foreign Minister Vivian Balakrishnan
Respecting sanctity of international deals a tenet basic to Republic's foreign policy
By Yasmine Yahya, Senior Political Correspondent, The Straits Times, 10 July 2018

Singapore yesterday reiterated that upholding international law and respecting the sanctity of international agreements is a tenet basic to its foreign policy.

That is why, in keeping its end of the bargain, Singapore has already spent more than $250 million on the Kuala Lumpur-Singapore High-Speed Rail (HSR) project, and is likely to expend another $40 million or so by year-end, Transport Minister Khaw Boon Wan said.

It is also why Singapore will honour the terms of its Water Agreement with Malaysia and expects its neighbour to do the same, added Foreign Minister Vivian Balakrishnan in Parliament.

Responding to a question from Mr Christopher de Souza (Holland-Bukit Timah GRC) on bilateral ties with Malaysia, Dr Balakrishnan said Singapore is still meeting its obligations on the HSR while waiting for Malaysia to clarify its position.

He added that the sanctity of international agreements is critical for a small state like Singapore.

If countries were to unilaterally revise or abandon terms of agreements, this would be "manifestly a recipe for disaster'', he said.

This principle lies at the crux of the HSR issue, he added.

Singapore signed the HSR Bilateral Agreement (BA) in 2016 in good faith, after both sides had negotiated and agreed to all the provisions, including those dealing with the eventuality that the HSR is terminated, Dr Balakrishnan said.

In recent weeks, he said, some Malaysian leaders have talked of terminating the project.

Dr Balakrishnan noted that Singapore had sent a third-person note to the Malaysian government seeking clarification of Malaysia's position on the HSR, but it has not replied.

Saying that the Government has a duty to safeguard public funds by recovering the costs, he added: "Should Malaysia cause the HSR project to be terminated, we will deal with the question of compensation from Malaysia for costs incurred in accordance with the BA and international law."



The same principle underlies the 1962 Water Agreement between Singapore and Malaysia, he said.

Malaysian Prime Minister Mahathir Mohamad has said he wants to renegotiate the terms of the deal as he feels the price of raw water sold to Singapore, as stipulated in the agreement, is "ridiculous".

Recounting past statements made by then Foreign Ministers S. Jayakumar in 2003 and K. Shanmugam in 2014 on water, Dr Balakrishnan said: "As was stated then, the core issue is "not how much we pay, but how any price revision is decided upon".

Malaysia lost its right to review the price of water under the agreement when it did not do so in 1987, he said, adding that neither Singapore nor Malaysia can unilaterally change the terms of the deal.

Singapore will fully honour the terms of the deal and expects Malaysia to do the same, he said.

While asserting the Republic's position on these issues, Dr Balakrishnan also made it clear that Singapore is committed to working with Malaysia's new government.

"A stable and prosperous Malaysia is good for Singapore and for our region," he said. "We have generally enjoyed a positive and constructive relationship with successive Malaysian governments and leaders, and we believe there is still much for us to achieve together."

In this and other foreign policy matters, Singapore stands by its fundamental principles, he added.