Mahathir to scrap Malaysia-Singapore rail project

Mahathir to scrap Malaysia-Singapore rail project

Malaysian Prime Minister Mahathir Mohamad (centre) arrives at a press conference in Kuala Lumpur on Monday. (EPA-EFE photo)
Malaysian Prime Minister Mahathir Mohamad (centre) arrives at a press conference in Kuala Lumpur on Monday. (EPA-EFE photo)

KUALA LUMPUR: Malaysia’s Prime Minister Mahathir Mohamad said he will cancel a proposed multibillion-dollar high-speed railway link to Singapore, as the new leader who returned to power in a surprise election upset this month seeks to rein in expenditure.

The scrapping of the plan will take time as it requires negotiation with Singapore, Mr Mahathir told reporters in Kuala Lumpur on Monday. The Prime Minister’s Office in Singapore and the city-state’s Ministry of Transport didn’t immediately respond to emails and phone calls seeking comments.

The decision would deal a setback to construction and rail companies in Asia, including those from China and Japan, that are keen to gain a slice of orders.

Former Malaysian Prime Minister Najib Razak agreed with his Singaporean counterpart Lee Hsien Loong to build the rail link to trim the land journey between the two Southeast Asian cities to 90 minutes, from about five hours now. The 350-kilometre line, with trains moving at a top speed of more than 300km per hour, was targeted to begin operating in 2026.

“It’s going to cost us a huge sum of money, we’ll make no money at all from this operation,” Mr Mahathir told reporters. “It’s only a short track. It is going to save you only one hour by taking the HSR.”

In an interview the Financial Times published earlier, Mr Mahathir said the decision was to “avoid being declared bankrupt”, adding Malaysia needs to do away with unnecessary projects such as the high-speed rail connecting Kuala Lumpur to the city-state because it “will not earn us a single cent”.

Construction of the rail link would have cost Malaysia 110 billion ringgit ($28 billion), Mr Mahathir told FT.

The prime minister also said Malaysia would talk to the Chinese government about renegotiating what he called “unequal treaties,” including a Chinese company-led $14 billion East Coast rail project along the eastern coast of peninsular Malaysia, according to the report.

Mr Mahathir’s government is faced with liabilities that exceed 1 trillion ringgit due to state guarantees on borrowing by an investment company that’s at the centre of a multibillion-dollar corruption scandal. That’s nearly double the 687 billion ringgit federal government debt number disclosed by the former administration.

Malaysia has also decided to end the search for the missing MH370 jet by US exploration company Ocean Infinity. The firm had won many extensions after the original three-month contract signed in January. No further time will be granted after May 29, Transport Minister Anthony Loke Siew Fook told reporters separately on Monday.


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