Good neighbours, good economics

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SINGAPORE (June 25): Malaysia’s new finance minister Lim Guan Eng is appealing to the Singapore government to be more understanding of his country’s tight financial position. Malaysia says it cannot afford the RM110 billion (S$37.3 billion) bill for an agreed-upon high-speed rail (HSR) project connecting Kuala Lumpur with Singapore. But pulling out could cost Malaysia RM500 million in compensation.

“We’re talking about the possibility of deferring and discussing with our good neighbours Singapore to see how they can help us out of this debt predicament,” Lim says in an interview with Channel NewsAsia. “I’m sure Singapore would understand that this is not the moment for us to embark on high-cost projects such as the HSR.”

Lim’s remarks have drawn some flak. “A contract is a contract, we should enforce as is. Otherwise, we set the wrong precedent,” said one comment on CNA’s Facebook page. “Singapore has lost much by relocating and preparing the place for this project. No love lost but we need to recover cost... (Click here to read the full story)