KUALA LUMPUR: Malaysia will carry out a detailed study to explore all opportunities including the viability of a domestic high-speed rail (HSR) project, Minister in the Prime Minister's Department Datuk Seri Mustapa Mohamed said.

This comes in the heel of the cancellation involving the multi-billion Kuala Lumpur-Singapore HSR project after both nations failing to agree on the changes raised by Malaysia on the project by the expiry date of the project agreement which was at midnight of Dec 31.

"Moving forward, the government will undertake a detailed study to explore all possible options, including the viability of a domestic HSR project and its benefits to Malaysians," he said in a statement today.

On the termination of the project, Mustapa re-affirmed the commitment by the Malaysian government to honour all obligations stipulated in the Bilateral Agreement (BA) for the project signed by the two nations. 

"Both countries will initiate the necessary to determine the amount of compensation," he said.

Mustapa also explained that the changes raised by Malaysia over the project since the middle of last year had seen both nations' failure to reach an agreement, resulting in the termination of the project.

The changes, he said, included the project structure, alignment and station design.

The original project structure would have required substantial and long-term government guarantees.

"The new project structure is expected to provide the government with the flexibility in financing options, such as deferred payments, public-private partnerships and the possibility of accessing financing at favourable rates.

"More importantly, the proposed changes to the project structure would have allowed us to leverage on the HSR project to accelerate Malaysia's economic recovery in a post-Covid-19 pandemic, by bringing forward the start of the construction phase by almost two years," he said.

He added that the changes proposed by Malaysia would have provided a much-needed boost to the country's construction sector and its supporting ecosystem.

"Taking into account these changes, both governments had conducted several discussions on our respective positions.

"However, we were unable to come to an agreement on these changes. The BA (Bilateral Agreement) therefore lapsed on Dec 31," he said.