KUALA LUMPUR, May 29 – Malaysia is dropping a plan for a high-speed rail link between its capital 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.
Mahathir Mohamad, the 92-year-old who triumphed over scandal-plagued 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 (US$28 billion) and will not earn us a single cent. That will be dropped,” Mahathir told the Financial Times.
The project, valued by analysts at about US$17 billion, was out for tender and was expected to be completed by 2026. Rail firms from China, Japan and South Korea had expressed interest in bidding for the project.
The 350km bullet-train line from Singapore to Malaysia’s capital Kuala Lumpur was expected to slash travel times to 90 minutes from the five or more hours by road today. 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.
“We have an agreement with Singapore,” Mahathir said. “We have to talk with Singapore about dropping that project.” Singapore’s government did not immediately have any comment on Mahathir’s reported vow to scrap the project.
The agreement for the rail project was signed in 2016, and was overseen by then-Malaysian Prime Minister Najib and his Singapore counterpart Lee Hsien Loong, who proposed the idea together in 2013. Najib said at the time: “One can have breakfast in Kuala Lumpur, lunch in Singapore, and be back in time for dinner in Kuala Lumpur”.
Mahathir has also said his government was haggling with Chinese partners over the terms of a US$14 billion (RM55.75 billion) rail deal aimed at connecting the South China Sea at the Thai border in the east with the strategic shipping routes of the Strait of Malacca in the west.
He estimated that Malaysia could cut almost a fifth of its US$250 billion (RM995.57 billion) national debt and liabilities by scrapping such big projects. Mahathir is moving swiftly to stabilise the nation’s finances after the government reported that debt was higher than previously disclosed under the former administration.
The prime minister had earlier announced plans to revoke the controversial goods and services tax that was intended to rake in RM43.8 billion (US$11.05 billion) this year and reinstate fuel subsidies amid rising oil prices.
Najib has faced two rounds of questioning from Malaysia’s anti-graft agency over a multibillion-dollar corruption scandal at state investment fund 1MDB following his shock election loss on May 9.
The former leader and his wife Rosmah Mansor have been barred from leaving the country after the new government reopened an investigation into the scandal. Police have raided Najib’s home and other properties linked to him, seizing hundreds of expensive designer handbags and luggage stuffed with cash, jewellery and other valuables. — Reuters