Scrapping HSR a costly mistake, says Umno spokesman

PETALING JAYA: The Pakatan Harapan government’s decision to scrap the multi-billion ringgit High Speed Rail (HSR) project with Singapore is a grave mistake as it will adversely impact the country’s economic growth, says Datuk Seri Abdul Rahman Dahlan.

Abdul Rahman said with the cancellation of the project, Malaysia might stand to lose an estimated RM209bil in gross national income and the opportunity to create 70,000 jobs.

The Umno strategic communications unit spokesman quoted a study by a research body – Institute of Developing Economies, Japan External Trade Organisation – which found that once the HSR is in operation, it would deliver a US$1bil (RM4bil) economic gain to Malaysia annually.

“The abandonment of HSR would also mean that the value of 1MDB’s Bandar Malaysia project, which was to be the terminus station of the HSR, would be substantially decreased – diminishing the ability of 1MDB to repay its debt,” he said in a statement yesterday.

On Monday, Prime Minister Tun Dr Mahathir Mohamad said that the HSR project would be cancelled as it is not beneficial and is expected to cost RM110bil.

When asked about the compensation to the Singapore government, Dr Mahathir said he “supposed” it would be RM500mil.

Abdul Rahman described Dr Mahathir’s remarks as “too simplistic” and questioned Dr Mahathir’s claims that the project is set to cost Malaysia RM110bil.

“This differs greatly from the range of RM50bil to RM70bil cost that the governments of Singapore and Malaysia had budgeted earlier this year.

“Did the Pakatan government take into consideration the net economic and spill-over effects beyond the cost of the HSR project when arriving at this hasty decision to cancel?” Rahman asked.

In pointing out that the cancellation of the HSR would disappoint foreign investors, Abdul Rahman said the Pakatan government should not be short-sighted in making such an important decision.

“It is obviously clear that the spillover benefits are so huge that it will be a wasted opportunity if we don’t proceed with the project now.

“Should this project be re-started in future years, the cost would only increase and the debt burden will increase manifold, which is totally against the Pakatan government’s plan to reduce the national debt,” he added.

The project, involving a 350km railway scheme linking Kuala Lumpur and Singapore, was expected to start operations in 2026.

It would have cut travelling time between Kuala Lumpur and Singapore to 90 minutes.