KUALA LUMPUR – Malaysia is dropping a plan for a high-speed rail link between Kuala Lumpur and Singapore, and will talk with its southern neighbour about the agreement to build it, Malaysia’s prime minister said in an interview published on Monday (May 28).
Tun Dr Mahathir Mohamad, the 92-year-old who triumphed over scandal-plagued Datuk Seri Najib Razak in a general election this month, has made it a priority to cut the national debt and pledged to review major projects agreed by the previous government.
“We need to do away with some of the unnecessary projects, for example the high-speed rail, which is going to cost us RM110 billion ($27.6 billion) and will not earn us a single cent. That will be dropped,” Dr Mahathir told the Financial Times.
The project, valued by analysts at about RM50 billion, is out for tender and is scheduled to be completed by 2026.
Singapore’s government did not immediately have any comment on Dr Mahathir’s reported vow to scrap the project.
Dr Mahathir had previously said there were high financial penalties for pulling out of the project and Malaysia would try to find out how it could reduce those costs.
He said he had not seen the agreement but was told “the compensation may be as much as 500 million”. However, he said he was unsure if this was in ringgit or dollars.
“It is a final decision but it will take time because we have an agreement with Singapore. We have to manage it at the least cost possible,” Dr Mahathir told a press conference Monday.
Dr Mahathir has also said his government was haggling with Chinese partners over the terms of a $10.4 billion rail deal aimed at connecting the South China Sea at the Thai border in the east with the strategic shipping routes of the Straits of Malacca in the west.
He estimates that Malaysia could cut almost a fifth of its $250 billion national debt and liabilities by scrapping such big projects.