Putrajaya’s decision to scrap the Kuala Lumpur-Singapore High-Speed Rail (HSR) project is final, Tun Dr Mahathir Mohamad has declared. At a press conference today, the Prime Minister also said he was informed that the penalty for withdrawing from the agreement is close to half a billion ringgit. “This is a final decision, but it will take time because we have an agreement with Singapore. “I am told it is almost RM500 million,” he said but added that he would confirm the exact compensation figure at a later date.
According to Tun Dr. Mahathir, the HSR is not beneficial, as it only shortens the travel distance between Malaysia and Singapore by one hour, but would cost Malaysians a large sum of money. “We will make no money at all for this operation,” he stressed. Asked if the Singapore government was informed or whether he would meet his counterpart on this matter, Mahathir said: “I don’t know.” However, he added that the government plans to scrap the project in “the least cost possible”. It was an ‘Unnecessary project’. Mahathir had earlier told the Financial Times that the HSR project was one of the country’s “unnecessary projects,” and belt-tightening measures were needed to avoid the country being declared bankrupt. “We need to do away with some of the unnecessary projects, for example, the High-Speed Rail project which is going to cost us RM110 billion, and will not earn us a single sen. That will be dropped,” he was quoted as saying.
The HSR project was conceived as part of the previous Barisan Nasional administration’s Economic Transformation Programme in 2010. The bilateral agreement with Singapore was inked six years later. Two project delivery partners – the Malaysian Resources Corporation Bhd-Gamuda Bhd consortium and the Syarikat Pembinaan Yeoh Tiong Lay Sdn Bhd-TH Properties Sdn Bhd consortium – signed on to the project last month. The project was aimed at cutting travel time between Kuala Lumpur and Singapore to just 90 minutes. The Financial Times also quoted Tun Dr Mahathir as stating that his government would be renegotiating several “unequal treaties” with China too which including the East Coast Rail Line (ECRL) project. Like the High Speed Rail, the East Coast Rail Line has been branded by critics as another of the previous Najib administration’s non-viable, big-ticket projects.
ECRL involves an RM55 billion loan from a China-owned bank and the employment of a state firm as the main contractor.