Malaysia is planning to negotiate with Singapore to postpone the construction of the high-speed rail project linking the two countries. The announcement was made by Malaysian Prime Minister Mahathir Mohamad, who said earlier in May that the project will be scrapped due to rising national debt. Prime Minister Mahathir told journalists: “The problem is that if we just unilaterally discard the agreement, we have to pay a very high compensation.”
He added that currently, the government does not have the necessary funds to build the project and deferred it is a feasible option considering the nation’s current financial situation. Earlier this month, it was reported that Singapore would seek appropriate compensation in case the project was cancelled.
As of May 2018, Singapore has invested more than S$250m ($184.4m) into the high-speed rail project, which would enable travelling from the Malaysian capital of Kuala Lumpur to Singapore in around 90 minutes. The project is expected to be discussed and reviewed during the visit of Malaysian Economic Affairs Minister Azmin Ali to Singapore, which is scheduled at the end of this month. According to Straitstimes.com, during Ali’s visit, an additional agreement regarding the high-speed project can also be signed between the two governments.
Malaysia’s previous administration signed an agreement on building the high-speed rail project in 2016. The current government is now re-assessing all major ongoing and planned infrastructure projects to reduce its debt. It recently suspended the construction works of the $20bn East Coast Railway Link project.