Cancelling the Kuala Lumpur-Singapore high-speed rail (HSR) project will cost the government a “very large sum of money”, says Prime Minister Dr Mahathir Mohamad.Thus, he said the government is looking into ways to lower the compensation needed to be paid to Singapore should the project be cancelled.
“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,” Mahathir was quoted as saying by The Edge Weekly. The HSR, worth RM100 billion, is one of several mega-projects initiated by former prime minister Najib Abdul Razak’s administration that Putrajaya is in the midst of reviewing. Another mega-project that could end up on the chopping block is the RM60 billion East Coast Rail Link (ECRL). Mahathir said it was “crazy” that Najib rolled out both projects at the same time.
“He didn’t seem to think about how we were going to pay for all these,” he said. “(He) knew very well that the ECRL, for example, is something we could not afford. It is not going to serve any purpose. It is not going to give us any returns. And yet, he went ahead and decided to build it,” he added. The prime minister said that the ECRL contract was “strange” as Malaysia had to fund the project with a loan from China, while also hiring contractors from that country. However, while the ECRL might be scrapped, the new Mahathir administration is not distancing itself from China.
The South China Morning Post reported that an internal memo from Mahathir dated May 14 to Foreign Ministry secretary-general Ramlan Ibrahim said that “our strong ties with China … will continue to flourish”.