JOHOR BARU - Malaysia has decided to proceed with a cross-border MRT link project with Singapore, with proposals to amend the project and reduce costs by 36 per cent.

Malaysian Prime Minister Mahathir Mohamad announced this on Thursday (Oct 31), during a press conference held at the Bangunan Sultan Iskandar Customs, Immigration and Quarantine (CIQ) Complex.

With the proposed changes, the total cost of the 4km rail project is estimated to be RM3.16 billion ($1.03 billion), instead of the original of RM4.93 billion, said the Malaysian government in a statement.

Officials from both countries are currently refining Malaysia's proposals to amend parts of the bilateral agreement for the project, which was signed last year.

A key feature of the revised project structure will be the involvement of the developer/owner of the Bukit Chagar land - where the Rapid Transit System (RTS) will connect to in Johor Baru - so the land cost will be waived. Malaysia is also proposing to use a LRT (Light Rail Transit) system to reduce costs.

Responding to queries on the development, a Singapore Ministry of Transport (MOT) spokesman said Singapore welcomes Malaysia's decision to proceed with the project.

Both sides are now discussing the changes to the project, the spokesman added. "As the changes will require amendments to the RTS Link Agreement, the discussions will take some time. Both sides are working hard on this."

Speaking to reporters after the press conference, Malaysian Transport Minister Anthony Loke said the market value of the Bukit Chagar land is about RM800 million.

Mr Loke added that Malaysia is also proposing to use a LRT system for the RTS, instead of using Singapore's MRT system as originally planned.

This could be similar to the LRT system in Kuala Lumpur, and will also help bring the costs of the project down, he said.

On the RTS project, Tun Dr Mahathir said it will help to alleviate the congestion at the Causeway "a little bit", pointing out what he saw as a limitation of the rail link.

"Many from Johor go to Singapore in motorcycles. Unless you can put the motorcycles on the train, these people cannot have their motorcycle in Singapore," he noted.

In March this year, Malaysia requested a six-month extension to respond to Singapore on issues relating to the RTS project.

Both countries later inked an agreement in May to formalise the suspension until Sept 30, with Malaysia reimbursing Singapore more than $600,000 for abortive costs incurred by the deferment.

Mr Loke said at the signing ceremony that his government was looking at ways to reduce the cost of the RTS, including roping in the private sector.

Malaysia later requested another month of extension till Oct 31, to which Singapore agreed.

Singapore's MOT said that the additional costs incurred during this period would be waived. But Singapore also reserves the right to claim additional costs incurred beyond Sept 30, should Malaysia request any further extension to the suspension period, said the MOT.

On Thursday, Malaysia's Transport Ministry announced that its national rail operator Prasarana Malaysia will remain as the joint venture partner for the RTS.

Prasarana will consult with SMRT to finalise the terms of the joint venture, it said. The Malaysian government had previously delayed confirming its joint venture partner.

Both governments signed a bilateral agreement last January to build the MRT link, which will connect Woodlands North station on the Thomson-East Coast MRT Line to Bukit Chagar.

The cross-border MRT link was initially targeted to begin operations by Dec 31, 2024.

The RTS project, which is based on Singapore's MRT system, would have the capacity to transport 10,000 commuters an hour in one direction during peak periods.

While he said the RTS project will go ahead, Dr Mahathir separately expressed his preference for another bridge to be built between the two countries, adding that Singapore refused this proposal.

"We subsidise water for Singapore to the tune of billions of ringgit (since 1962)... by selling water for three sen (1 Singapore cent) per 1,000 gallons. On the other hand, when we want to build a bridge, its objected to by Singapore."

"We are willing to sacrifice our money to support Singapore so that they can buy cheap water for themselves. But when we want to build a bridge to solve our traffic problems, they refuse to have a bridge, I don't know why," he added.

Dr Mahathir said: "In the year 3000, I won't be around. But at that time there will be 100 million people from Johor wanting to enter Singapore."

"Still, there cannot be another bridge. So, I don't see how we can be so accommodating to Singapore, without Singapore accommodating us," he noted.

He also took the opportunity to say he hopes Malaysia can increase the price of the water it sells to Singapore.