Singapore has announced it will seek compensation if Malaysia unilaterally cancels the high-speed rail project currently being carried out by the two countries.
Singapore Transport Minister Khaw Boon Wan has told the national parliament that a compensation will be based on the original high-speed rail agreement signed between the two governments in 2016, reported Bloomberg.
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Earlier in May, Malaysian Prime Minister Mahathir Mohamad announced plans to cancel the high-speed rail project, which would have connected Kuala Lumpur with Singapore, in an attempt to reduce the national debt.
However, Malaysia is yet to officially convey the decision to the Singaporean government.
As of May this year, Singapore spent more than S$250m ($184.4m) on the project, including costs related to the formation of a government agency to manage the rail work, land acquisition and appointment of workers.
The associated costs of the project are anticipated to rise further by the end of this year.
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By GlobalDataSingapore Foreign Minister Vivian Balakrishnan was quoted by Reuters as saying: “Should Malaysia cause the HSR project to be terminated, we will deal with the question of compensation from Malaysia for costs incurred in accordance with the bilateral agreement and with international law.”
Valued at nearly $17bn, the high-speed rail project was planned to be completed in 2026. It was expected to reduce travelling time from the Malaysian capital of Kuala Lumpur to Singapore to around 90 minutes.
Last week, Malaysia stalled the construction of the $20bn East Coast Rail Link project. China Communications Construction (CCCC) was the main contractor of the project.
