Malaysia newly appointed Prime Minister Tun Dr Mahathir Mohamad said the government may take another look at several large projects that are being shelved to reduce the country’s financial burden of the country. Dr Mahathir, who had put the national debt higher than stated by the previous administration, said the government will reconsider some of these projects when the country achieves better financial position.
“What we are doing now is to ensure that these borrowings can be handled, government spending is reduced and we will achieve a budget that will not show a very big deficit,” he said in Putrajaya yesterday. The government cancelled the first mega project initiated under the previous administration on Tuesday — the high-speed rail (HSR) connecting Kuala Lumpur and Singapore — a RM110 billion joint project with the city-state. The train route was meant to host eight stations — seven in Malaysia and one in Jurong East, Singapore — with 335km of the line located in Malaysia and another 15km in Singapore. It was estimated that 22 million people will ride the line by 2036. The HSR deal, agreed by the previous federal administration in December 2016, was designed to speed passengers between the two cities in 90 minutes when it is completed in 2026.
Speaking to the media after chairing a Cabinet meeting in Putrajaya on Wednesday, Dr Mahathir said the decision behind Malaysia’s withdrawal from the HSR deal was due to the project’s high cost. Dr Mahathir had previously described the HSR project, which valued at RM110 billion, as being “unnecessary and will not earn the country a single sen”. To a question on whether the HSR project could be reconsidered if the country’s finance is in a better position, Dr Mahathir replied, “definitely.” Dr Mahathir said despite the government’s withdrawal from the project, discussions between Malaysia and Singapore will be held to provide greater clarity on the matter. “The Cabinet has agreed to cancel the HSR but the final decision depends on a discussion with Singapore,” he said. “We will listen to them. They are our good partners,” said the Prime Minister.
The PM had previously said that Malaysia may have to pay a penalty of 500 million for cancelling the project, but he was unsure if the amount was in ringgit or Singapore dollars. “I have yet to verify the denomination, but I suppose it will be in ringgit,” he said earlier this week. Apart from the HSR cancellation, Dr Mahathir also said the government has agreed to cancel another railway initiative, the third mass rapid transit (MRT3) project. In a tender notice released in November, MRT Corp said MRT3 is expected to span 40km, stretching 30km underground with a total of 26 stations. CIMB Equities Research had in September forecast the project would cost between RM35 billion and RM40 billion. “The MRT3 project will be discontinued,” Dr Mahathir said. Other multibillion ringgit projects still under review include the East Coast Rail Link (ECRL) and the Bandar Malaysia project. In March, it was estimated that the RM55 billion ECRL had reached a progress rate of 13% and is expected to be completed in June 2024.
The present government is trying to cut down its obligations after announcing that the national debt was RM1 trillion, considerably higher than the previous government’s figure of RM686.7 billion.