KUALA LUMPUR - The Johor state government said it fully supports the cancellation of the Kuala Lumpur-Singapore High-Speed Rail (HSR) project as part of measures to reduce the national debt, calling it timely and appropriate.
"The federal government's decision to cancel this project is ... in line with the Pakatan Harapan-led government's approach not to burden the nation with mega projects that could lead to an increase in debt, at the same time, reducing national debts," Johor chief minister Osman Sapian in a statement on Sunday (June 3).
Responding to comments by the state's former chief minister Mohamed Khaled Nordin, now Johor Umno state liaison chairman, that the RM110 billion (S$37 billion) HSR project was a game changer for development in the southern Johor region, Datuk Osman said it is unbecoming and unacceptable given the current economic situation.
"This project, if implemented, will only be completed and start operation by Dec 31, 2026, which is about nine years from now. It will definitely take a long time before we could get a return on the cost, let alone profit, and this does not take into account any other costs, including maintenance costs. Investment in the project which reaches RM110 billion is very high, while the returns are low," he added.
Datuk Khaled had previously asked the new Pakatan Harapan (PH) government to explain its decision to cancel the mega project, adding it was not a political project and should not be politicised as the HSR was meant to help develop the potential of the southern states.
"When it was decided that it would be implemented, it was hoped to be a game changer for development in the southern region of Malaysia," Mr Khaled was quoted as saying by Bernama news agency on Friday (June 1).
Mr Osman said the new state government is fully committed to fulfilling its promises to bring about development to central and northern Johor through more modern and connecting networks of transportation modes which are also cost-effective.
"What is most important is that the services offered can be enjoyed... by the people from all walks of life and those projects implemented do not burden the country's finances whereby it is forced to incur massive debts for a very long period of time," he added.
The previous Johor government, under the Umno-led Barisan Nasional coalition, "clearly failed" to develop the state in a balanced and comprehensive manner, he said
"There are parts in the state that lead 'luxurious' life while some others are left behind, neglected or discriminated upon as what is happening in the northern part of Johor which is vulnerable and exposed to become a victim of development in the form of speculative property game."
On the RM500 million in penalties that Malaysia has to pay for the cancellation of the project, Mr Osman said bearing such short-term losses is better than having to bear the burden of paying debts of up to RM100 billion, which could have a very bad and negative effect on the country.
"Serious and critical tasks that the PH government now has to undertake is to strengthen and restore the country's financial condition that has been destroyed by the previous administration and leadership as well as to ensure that the people are always protected from the burden of a high cost of living," he said.
After taking power, Prime Minister Mahathir Mohamad announced the cancellation of several mega projects, including the HSR, and introduced a slew of spending cuts as part of efforts to reduce the national debt of RM1 trillion.
The Mahathir administration has said that the cost of building the HSR, at RM110 billion, was prohibitive, while former prime minister Najib Razak claimed it would have cost only RM72 billion, and that its economic benefits would far outweigh the estimated price tag.