27 April 2018
The Cross-Border Railways Act 2018 (“Act”) has been gazetted on 19 April 2018 and will come into force on a date to be appointed.
The two key purposes of the Act are to:
- support the planning and construction of the upcoming cross-border railways; and
- put in place the necessary regulatory framework to ensure safe and secure cross-border railway operations.
Two key cross-border railway projects are currently underway, namely, the Kuala Lumpur-Singapore High Speed Rail (“HSR”) and the Johor-Singapore Rapid Transit System (“RTS Link”) projects. The Land Transport Authority (“LTA”) aims to meet the targeted completion of the RTS Link by end-2024, and the HSR by end-2026.
By way of background, the Cross-Border Railways Bill (“Bill”) was read the second time in Parliament on 6 November 2017 and referred to a Select Committee. Parliament had invited written representations on the Bill for the consideration of the Select Committee from 9 to 24 November 2017. The Select Committee presented its Report on the Bill to Parliament on 14 February 2018. The Bill was read for the third time and passed in Parliament on 19 March 2018.
Act revised following Select Committee Report
The Bill had prohibited the assignment and transfer of commercial contracts and any right, benefit or privilege under such contracts. Any transfer or assignment would be rendered null and void.
The Select Committee received feedback that the absolute prohibition against such transfers and assignments, in particular for the railway assets operator under a railway assets contract, would deter private financiers from offering financing and this would impact on the commercial viability of the project. The train service operator could face similar difficulties in relation to cross-border train service contracts.
The Select Committee agreed that the representors’ concerns on bankability were valid. However, it noted that the original intent of prohibiting transfer and assignment of contracts remained important, i.e. to ensure that no right, benefit or privilege can be transferred or assigned to a third party without Government oversight. To balance both objectives, the Select Committee agreed to amend the Bill to allow for transfers or assignment of contracts, or any right, benefit or privilege under such contracts, subject to approval from the Minister for Transport.