Malaysia's Prime Minister Mahathir Mohamad has said the High-Speed Rail (HSR) link between Kuala Lumpur and Singapore is "postponed", and not scrapped.
Tun Dr Mahathir, in Japan on his first trip abroad since his Pakatan Harapan pact won the general election last month, told Nikkei Asian Review on Monday that the HSR was temporarily shelved due to its high costs.
He reiterated at a press briefing in Tokyo for Malaysian media yesterday that his new administration needs to study the multibillion-dollar rail project.
"In a way, it's postponed. At this moment, we need to re-study and, if we are short of funds, we can delay the implementation of the project or reduce the scope of project," he said.
His comments come less than two weeks after Malaysia announced that it was axing the RM72 billion (S$24.3 billion) HSR project as it moved into austerity mode and sought to slash its RM1 trillion federal debt.
Dr Mahathir had said then that the HSR and other mega projects signed off by the previous administration would be revisited once Malaysia's finances improved.
In his interview with Nikkei, Dr Mahathir acknowledged the need for high-speed rail in the future but said Malaysia "cannot afford it at this moment". "We cannot say we will never have high-speed rail in Malaysia," he told the Japanese publication. The HSR deal was signed by Malaysia and Singapore in December 2016, with the 350km link scheduled to begin services in December 2026. It would cut travel time between Singapore and Kuala Lumpur to 90 minutes, from four hours by car currently.
The line was to have eight stations, with one in Singapore's Jurong East .
Singapore's Transport Minister Khaw Boon Wan, in a statement on June 1, said the Republic has "requested the Malaysian government through diplomatic channels to clarify Malaysia's position on the project".
Mr Khaw said should Malaysia cancel the project, Singapore will study the implications and exercise its rights - including any right to compensation for expenses - in accordance with the terms of the bilateral agreement signed in 2016.
Malaysia had earlier indicated that there was a RM500 million compensation payment to be made if the deal was cancelled.
Mr Khaw, who is also Coordinating Minister for Infrastructure, added: "Singapore continues to support the HSR project and to fulfil all its obligations under the agreement." Malaysia has said that Dr Mahathir will personally handle negotiations with Singapore, and that it was not completely shutting the door on the rail link.
Dr Mahathir met Japanese Prime Minister Shinzo Abe yesterday, and said Malaysia had sought yen credit from the Japanese government as part of measures to resolve its debt problem. Japan has agreed to study Malaysia's request for the soft loan, said Dr Mahathir, but said that the amount was not discussed.
Malaysia and Japan also agreed to keep the Strait of Malacca and the South China Sea free for navigation for all countries.
"Japan is willing to cooperate with any country to support this concept with Malaysia. I am resolved to further strengthening cooperation conducive for regional peace and stability, including in the maritime safety area," Mr Abe said at a joint press conference with Dr Mahathir.
After the event, Mr Abe presented Dr Mahathir with a Japan World Cup team jersey printed with Dr Mahathir's name and the number 7 to show he is Malaysia's seventh prime minister.
Dr Mahathir presented Abe with a book on himself, and said it would enable Mr Abe to know him better.