In an effort to shave off its RM1 trillion (S$337 billion!) debt, the Malaysian government is considering to drop the highly anticipated inter-country project with its southern neighbor: the Kuala Lumpur-Singapore high-speed rail (HSR) project.
Newly elected Malaysian prime minister Mahathir raised the possibility of dropping the RM100 billion (S$34 billion) project with Singapore in an interview with The Edge published last Saturday. But then again, if the HSR project was to be dropped, it would incur significant costs — and Tun Dr. Mahathir has stated that his government is looking into ways to reduce the amount of money it has to pay Singapore.
“The terms and agreement for the HSR are such that if we decide to drop the project, it would cost us a lot of money. We have entered into an agreement with Singapore. If we break the agreement, we have to pay a very large sum of money,” the prime minister told The Edge.
The proposed HSR system — spanning 335km from Jurong East in Singapore to the Malaysian capital of Kuala Lumpur — was announced by previous prime minister Datuk Seri Najib Tun Razak and his Singaporean counterpart Lee Hsien Loong in 2013. A bilateral agreement on key issues was signed three years later, and by 2017, multiple parties from China, Japan and Europe threw their bids to win the contract.
Upon its targeted completion in 2026, the railway would be expected to cut travel time between Kuala Lumpur and Singapore to just 90 minutes. Currently, it takes from about four to five hours by road and an average 50 minutes to travel by plane.
As attractive as the railway sounds, PM Mahathir doesn’t think it’s feasible. In the interview with The Edge, he claimed that his predecessor and former protegé “didn’t care” about the government’s debt ceiling when he signed on the project. Alongside the HSR, former prime minister Najib also planned to launch the East Coast Rail Link project, with a contract value of RM60 billion (S$20 billion).
Both mega infrastructure projects, said Mahathir, was funded by a borrowing spree that swelled the national debt to RM1 trillion.
Earlier in May, before Tun Mahathir’s return to power, MyHSR Corp chief executive urged all sides not to politicize the project, stating that it would be a waste if it was aborted.
“If we don’t do it, not only we have to incur abortive cost in our own border, we also may have to provide compensation to Singapore,” said company CEO Mohd Nur Ismal Mohamed Kamal.
“This, even though it is quite big, is minuscule compared to huge opportunities we are going to miss.”
