Singapore’s Transport Minister Khaw Boon Wan failed to receive his US$125 million penalty or convince Malaysia in proceeding ahead with the High Speed Rail (HSR) construction yesterday (Sep 5). The decision to proceed will be deferred until May 2020, which happens to be the General Election year for Singapore.
According a joint press release by both countries, Malaysia will pay S$15 million as penalty by end-January 2019 for deferring the decision. The HSR decision will be deferred by May 2020, and if the Malaysia do not continue, the country will have to pay the contracted US$125 million (S$171 million) penalty.
The May 2020 deadline however is a sensitive one as Singapore would be holding its General Election, where a new Singapore government would likely give Malaysia a more favourable deal as compared to the incumbent ruling party PAP that is bent on disrupting the Mahathir administration.
Singapore’s incumbent ruling party is deeply unpopular at the moment following public insecurity and increasing hardships due to poorly-planned housing policies and hefty tax increases. At the heart of the bitterness is Prime Minister Lee Hsien Loong, who in recent years made himself a public enemy by abusing power to invalidate his father’s last will and artificially inflating the cost of living through his tax increases. The dictator PM needed money to fund his overseas investment losses at GIC, where he sits as Chairman, and Temasek Holdings, where his wife sits as CEO.
The Malaysian government is currently in a trillion RM (S$333 billion) debt left behind by its corrupted former Prime Minister Najib Razak. Current PM Mahathir Mohamad had earlier emphasised that the country do not have money to continue funding the multi-billion projects signed with China and Singapore by the former dictatorship regime, and hence the KL-Singapore HSR was terminated.
According to Transport Minister Khaw Boon Wan, the Singapore government has spent more than S$250 million on the HSR construction. The S$15 million compensation however stands at barely 6% of the costs incurred. The area singled out for development, Jurong Lake District, will now be a construction mess until 2020, when a decision of the HSR is finalised. Property speculators and investors are currently the biggest losers as their investments are unlikely to see any return until 2020, or even worse, if the HSR is shelved.