Prime Minister Tun Dr. Mahathir Mohamad has confirmed that the Kuala Lumpur-Singapore high-speed rail (HSR) project will be scrapped as it does not benefit the country
Though the Malaysian government has yet to discuss the matter with Singapore, Free Malaysia Today reported Malaysia might have to pay RM500 million in compensation for cancelling the project
Announced by former PM Najib Razak in 2010, analysts initially estimated that construction of the KL-Singapore HSR project will cost USD13 billion (RM51.76 billion) to USD15 billion (RM59.72 billion)
The rail service was aimed at cutting travel time between KL and Singapore to 90 minutes and was scheduled to begin operations in 2026.
The 350km route was mapped to cut across four states in Malaysia, with plans to stimulate economies of the localities surrounding the eight stations serviced along the way (from Bandar Malaysia in Kuala Lumpur to Jurong East in Singapore).
Tun Dr. Mahathir previously announced his intention to drop the project in an interview with Financial Times, saying that it "will not earn us a single cent"
Tun Dr. Mahathir explained that the move is a part of deep cuts made to government spending and investment to "avoid being declared bankrupt".
"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 and will not earn us a single cent," he was quoted as saying by Financial Times.
In the same interview, Tun Dr. Mahathir added that the government will also review and renegotiate "unequal treaties" with the Chinese government, such as that of the USD14 billion (RM55.72 billion) East Coast Rail Link
The prime minister also told Financial Times that many large projects and government agencies set up by the previous government were "not necessary" at all.
"Mostly, it was about trying to make the prime minister popular and it cost billions of dollars," he added.
In a report by Malay Mail, Tun Dr. Mahathir estimates that Malaysia could reduce almost one-fifth of its RM1 trillion national debt and liabilities by dropping such projects.
Last week, Tun Dr. Mahathir revealed that Malaysia has amassed an alarming RM1 trillion of debt. Here is the breakdown, according to the Finance Ministry: