In a statement today, the ministry said Malaysia has to compensate Singapore for costs it has incurred as part of its obligations under the bilateral agreement.

Previously, a well-placed source in Putrajaya told FMT the compensation Malaysia would have to pay Singapore is around RM320 million.

The ministry said Prime Minister Lee Hsien Loong and his Malaysian counterpart, Muhyiddin Yassin, discussed the status of the project as recently as Dec 2.

“Malaysia has since allowed the HSR bilateral agreement to be terminated, and has to compensate Singapore for costs already incurred by Singapore in fulfilling its obligations in accordance with the parties’ agreement.

“Our relationship with Malaysia is deep and multi-faceted, and we look forward to continued good relations and close cooperation with Malaysia for the mutual benefit of the people of both countries,” it said.

In a separate joint statement, the offices of Lee and Muhyiddin said the bilateral agreement had lapsed after Malaysia and Singapore failed to agree on Putrajaya’s proposed changes to the project.

The proposed changes were made in light of the impact of Covid-19 on the Malaysian economy.

“Both countries will abide by their respective obligations, and will now proceed with the necessary actions, resulting from this termination of the HSR agreement,” the joint statement added.

The bilateral agreement, signed in 2016, had been suspended at Malaysia’s request since September 2018, with the deadline for the extension of the suspension expiring yesterday.

In November, sources in the know told FMT that Putrajaya was mulling proceeding with the HSR project without Singapore.

They said the new line would be between Kuala Lumpur and Johor Bahru.

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