Malaysia’s HSR Heartbreak: The $270‑Million Shrink‑age Saga
Why the Singaporean tall‑story has become a scaled‑down budgetary nightmare
In a twist that looks more like a tragic comedy than a diplomatic negotiation, Malaysia’s cabinet minister has told reporters that the cost to compensate Singapore for scrapping the high‑speed rail (HSR) project will be noticeably less than the $270 million Singapore officially claimed.
Datuk Seri Mustapa Mohamed—an economist who spent nights buried in treaty drafts—said the Singapore transport minister, Ong Ye Kung, recently “told Parliament that the whole thing has cost about $270 million.” You’d think that number would be the final jackpot.
But Mustapa’s comments make it clear that the Singaporean figure likely includes several ghost costs (think consultancy delays, design overhauls, and a mountain of manpower that never got to run on rails).
Key Take‑aways from the Cabinet’s murmurings
- Land’s not included: Singapore claims it paid for land acquisitions in Singapore; Malaysia’s response: “Play it safe, we’ll definitely get your mortgage back.”
- Compensation’s actually lower: The Malaysian side is confident that the money will be much less than the Purported $270 million.
- Not a final deal yet: Negotiations are still in the “Let’s speak about it at lunch” stage.
Why the HSR Record Ended With a Band‑Aid
It all began in 2020 when both sides could not agree on costly amendments. Malaysia let the agreement expire on December 31—after Singapore forced a suspension in 2018, which left the project so hollow it earned a $15 million rebate.
Transport Minister Ong noted that much of what Singapore spent was “abortive” — services and manpower that never got the chance to cross the track. Singapore’s “official” compensation figure, he said, omits land‑purchase costs because the land’s value could be recovered. And there’s an eye‑popping surprise called a misc. abortive cost now under scrutiny.
Terms of Silence, Trials of Transparency
Both sides have a confidentiality clause that keeps specific amounts hush‑hush. Mustapa tweeted that while he won’t share the numbers, Malaysia will “honour its obligations,” and will engage in the paperwork needed to lock in a final figure.
He didn’t shy away from promising a disclosure once the number is stamped golden. A blend of political grace and dry humour is tossed over a core message: we’re all playing a game of “Who’s watching the money?” with a delayed payout for fewer rails than expected.
What the travelers, investors, and tourists can expect
In short: the dream of super‑fast links between Kuala Lumpur and Singapore is a beautiful memory. The cost it takes for it to be unceremoniously dropped is now presumably less than the projected “big‑money” figure. The discussion will be carried out in secret, but an official announcement is slated once a super‑confidential treaty is finally signed.
Until then, keep your coffee and eyes open, because a less-than‑$270-million “settlement” is on the horizon and it’s probably going to be quite the budget affair.
Removing AssetsCo
Malaysian High‑Speed Rail Hurdle: Why the Gov Wants to Drop AssetsCo
First, the cost crunch
Mr Mustapa told the media that cutting out AssetsCo could trim costs by roughly 30%—a pretty big slice off the budget pie. He reasoned that the government had already invested a 30‑year guarantee worth RM60 billion (about S$19.7 billion) into the company, paying about RM2 billion every year. If payments fell short, the state would cover the gap from other sources, effectively turning a liability into a saving.
Then the spill‑over model
- Design & stations – Re‑engineering the line without AssetsCo could slosh out leaner.
- Network operation – Removing the vendor’s network role would cut overhead costs.
- 90‑point estimate – The overall model is projected to be 30 percent cheaper, saving the country millions.
Singapore’s sticky response
Singapore threw a straight‑up veto at Malaysia’s suggestion. “It’s a fundamental departure from the agreement and it’s a major change,” Mr Ong explained. The removal of a core player was “not just a tweak” but a recipe for the project’s demise, according to him.
Why Malaysia still wants the rails running
Mr Mustapa remains upbeat: “We still want to hit the tracks.” He mentioned a 50‑year economists’ forecast predicting RM300 billion in economic benefits. “The Covid‑19 timeline pushed us to rethink the implementation model, not the ambition itself.”
Wrap‑up
In short, the Malaysian government is trying to slash a pricey partnership while still dreaming of a high‑speed future—only the logistics got tangled up along the way.
