Scrapping of high-speed rail okayed by KL Cabinet

Malaysian Prime Minister Mahathir Mohamad (centre) at a press conference in Putrajaya, Malaysia, on May 30, 2018.
Malaysian Prime Minister Mahathir Mohamad (centre) at a press conference in Putrajaya, Malaysia, on May 30, 2018.PHOTO: EPA-EFE

PUTRAJAYA • Malaysian Prime Minister Mahathir Mohamad said yesterday that the Cabinet has agreed to scrap the Kuala Lumpur-Singapore high-speed rail (HSR) project due to high financial costs, subject to discussions with the Singapore Government.

When asked why the project, which he said would cost RM110 billion (S$37 billion), was called off, Tun Dr Mahathir said: "The most important thing for us now is to reduce the amount of borrowings by the government. If this country is to avoid bankruptcy, we must learn how to manage our big debts. So, one of the ways, of course, is to do away with projects that are not beneficial to the country," he said.

When asked if the HSR and other mega projects would be revisited once Malaysia's finances are better, Tun Dr Mahathir said: "Definitely."

He added that there will be a more detailed briefing today on what the government is doing to ensure the borrowings can be handled and spending reduced.

The new government has been grappling with slashing expenditure, amid revelations that ousted premier Najib Razak's administration racked up a debt of RM1 trillion.

Datuk Seri Najib yesterday debunked the cost of the HSR stated by Dr Mahathir, and said the Malaysia-Singapore joint committee, until the beginning of this year, had projected that the cost of the project is about RM72 billion, including the acquisition of land paid to Malaysians.

Dr Mahathir said earlier this week that Malaysia may have to pay RM500 million in compensation for scrapping the HSR deal. The service, targeted to begin by Dec 31, 2026, will cut travel time between Singapore and Kuala Lumpur to 90 minutes.

The government is also cancelling a third line for the Klang Valley Mass Rapid Transit project, estimated at RM40 billion.

Another project, the East Coast Rail Link, is still being reviewed. It links Kuala Lumpur and Kota Baru, and is to be financed by a RM55 billion loan from China's Exim Bank.

Hazlin Hassan

A version of this article appeared in the print edition of The Straits Times on May 31, 2018, with the headline 'Scrapping of high-speed rail okayed by KL Cabinet'. Print Edition | Subscribe