Speaking to the state media today (July 9), Singapore’s Transport Minister Khaw Boon Wan threatened Malaysia that he will demand for the full penalty, estimated at RM500 million, and add more claims to the amount:
“The costs incurred by Singapore will add to the total amount of compensation, it is in Malaysia’s own interest to officially inform us of its position on the HSR project early on to minimise the amounts involved. The Singapore Government will continue to press for official clarification from the Malaysian Government.”
Citing international laws and saying he “cannot ignore” Malaysian leaders’ public statements on the termination of the High Speed Rail, the ex-Malaysian Singapore Minister threatened to sue Malaysia in the international court:
“Should Malaysia cause the HSR project to be terminated, we will deal with the question of compensation from Malaysia for costs incurred by Singapore in accordance with the bilateral agreement and international law… There are appropriate processes at law in case Malaysia should wish to propose changes to the bilateral agreement, or to terminate it. These due processes should be followed. If the Malaysian government fails to provide an official response, then we cannot ignore the public statements made by the Malaysian ministers, and Prime Minister Dr Mahathir himself, on the termination of the project, and Singapore will act according to its rights.”
Despite having being informed by the Malaysian government publicly in May that the High Speed Rail project would be cancelled, Minister Khaw Boon Wan insisted that he is continuing the project. Claiming that he has not received any official notice from Malaysia, the S$1.1 million-a-year PAP Minister blamed Malaysia for the increasing expenses each month and revealed that he had already spent S$250 million on the project:
“Based on preliminary estimates, the Government has spent more than S$250 million on the HSR project by the end of May this year, and this includes costs for consultancies to design the civil infrastructure, costs for dedicating manpower to oversee and deliver the project and costs for land acquisition. This is actual money that has already been spent, our taxpayers’ money. We can recover value for some of the expenditure, even if the HSR project does not proceed. But a significant amount which has been spent will be completely wasted expenditure if the project does not proceed. In the month of June, Singapore incurred more than S$6 million costs for the project, while the same amount is expected for July. These costs will increase rapidly with time, with at least S$40 million more expected to be spent from August to the end of 2018 for ongoing manpower costs, operating expenses and contract costs. It will be most unfortunate, if Malaysia has in fact decided to terminate, but delays in notifying us, because there will be further wasted expenditure.”
Singapore and Malaysia is currently in a diplomatic row over the High Speed Rail and water price negotiation. According to Malaysia Prime Minister Mahathir Mohamad, Singapore pays only 3 sen (S$0.01) per thousand gallons of raw water supply. This pales to 50 sen (S$0.17) per thousand gallons paid for by fellow Malaysian state Melaka.
Aside from the water and High Speed Rail issues, Singapore was also found to be one of the chief culprits assisting former Malaysia Prime Minister Najib Razak siphon billions from the Malaysian state fund 1MDB.
Despite marketing itself as a centre of international arbitration law like Switzerland, Singapore is unable to resolve amicably with its neighbour. Earlier this year, China rejected Singapore’s offer to set up a law arbitration center for its lucrative One Belt One Road project.
The shelving of the High Speed Rail project has landed the Singapore government in serious planning troubles. Due to the absence of a backup plan, the second Central Business District planned for Jurong is now in limbo. The Singapore government had also moved it’s port from Tanjong Pagar to the far flung western rural area of Tuas.