Guan Eng: Higher abortive cost if Malaysia didn't postpone HSR quickly

Abdul Razak Raaff

BENTONG: The government would have to pay a higher abortive cost for the Kuala Lumpur-Singapore High-Speed Rail (HSR) project if it waits for all tenders to be closed and bids to be accepted by year-end.

In saying this, Finance Minister Lim Guan Eng said logically, any delays by the government would lead to it having to pay a higher compensation amount.

“Why should we wait until the end of the year? If we don’t do it now (delay the HSR), we would have to pay even more (in abortive cost).

“We have to understand that the longer the project is delayed, the more the government would have to pay,” he said.

Lim was speaking to reporters after attending a Sales and Services Tax (SST) briefing programme organised by the Customs Department at the Bentong Chinese Assembly Hall, here on Saturday. Also present was Customs deputy director-general, Datuk Paddy Abdul Halim.

Lim was commenting on a statement by former prime minister, Datuk Seri Najib Razak, who had said the government should have waited until all tenders were closed and all bids received before deciding on whether it would postpone or cancel the HSR project.

Najib had noted that based on the project timeline, there are only four months left until the bidding process ends.

Najibs said the tender for financing packages are usually very competitive, hence it would not be impossible to see rates of 0.1 per cent, with the repayment moratorium period being the same as projects in India and Indonesia.

Malaysia and Singapore had last week inked an agreement to postpone the HSR project for two years until May 2020.

Economic Affairs Minister, Datuk Seri Mohamed Azmin Ali, had previously said that Malaysia would pay an abortive cost of SGD$15 million (RM45.1 million) to Singapore, following the postponement.

The amount has to be paid on or before Jan 31 next year.

Meanwhile, commenting on the SST, Lim said the government is ready to expand the list of SST-exempted items, based on public feedback, especially those from the B40 group, by the year-end.

“For example, mobile phone accessories which previously had a 10 per cen tax have been reduced to five per cent after receiving feedback from the public.” © New Straits Times Press (M) Bhd