When questioned by state media reporters if the S$15 million compensation for the S$250 million work done for the High Speed Rail (HSR) project has been fair, Deputy Prime Minister Teo Chee Hean accidentally revealed that the Singapore government actually inflated the HSR project costs by ballooning land costs:
“Some of the (S$250 million) is actually represented in costs which are recoverable. For example, the costs associated with land acquisition. We still continue to have the land so it’s not reasonable to put that on Malaysia.”
The Minister’s admission collaborate with States Times Review’s earlier analysis that the bulk of the S$250 million is inflated through land costs, exorbitant site studies and documentation of legal technicalities.
Minister Teo Chee Hean added that he is unable to promise if the HSR project will resume or abort after the May 2020 deadline, but Foreign Minister Vivian Balakrishnan cut in to warn Malaysia that there will be no second deferment:
“On whether there can be further deferments, the short answer is no. First of all, the original bilateral agreement does not provide for it. The deferment is now pursuant to this side letter and the side letter states specifically that if a decision is not made by the expiry period, the project is considered terminated. Full compensation as specified in this agreement will then be liable. So our financial interests are absolutely safeguarded.”
In the joint-press conference yesterday (Sep 6), Singapore will receive S$15 million in compensation, instead of the US$125 million penalty agreed in the HSR contract. Malaysia will have up to May 2020 to decide whether if the HSR project will continue, failing which, the full penalty will be imposed.
May 2020 is however a strategic date for Malaysia as Singapore will be holding the General Election. The ruling party PAP, which have a long-time bad blood with Malaysia, is facing deep resentment and bitterness from Singapore voters. It is unlikely the ruling party PAP will be government in the next election as voters have been angered by a 28% GST increase, increasing poverty, hefty tax increases and the mishandling of the HDB lease.