Malaysia's Cabinet agreed to scrap HSR due to high costs: Mahathir

PUTRAJAYA: Malaysia's 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, Prime Minister Mahathir Mohamad said yesterday.

When asked why the project, estimated to cost RM60 billion (S$20.2 billion), was called off, he said: "The most important thing for us now is to reduce the amount of borrowings by the government. We have borrowed too much money. And we cannot pay so much money if we continue with the project.

"So we are not only looking at HSR but also mega projects, which cost us billions of dollars," he said after chairing the weekly Cabinet meeting.

"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."

Dr Mahathir's Pakatan Harapan government has been grappling with slashing government expenditure since it came to power on May 9.

He said earlier this week that Malaysia might have to pay as much as RM500 million in compensation for scrapping the HSR deal, which was inked in December 2016.

When asked if the HSR and other mega projects would be revisited once Malaysia's finances are better, he said: "Definitely. I think tomorrow (Thursday) you will get a more detailed briefing of what we are doing to ensure that these borrowings can be handled, that government spending will be reduced, and we will achieve a Budget that will not show a very big deficit."

The KL-Singapore HSR service was targeted to commence by Dec 31, 2026.


In another development, Malaysia will go ahead with plans to build a cross-border MRT line between Johor Baru and Singapore but wants to look at ways to lower costs, said Transport Minister Anthony Loke.

The government has agreed to continue with the Rapid Transit System Link, which will connect Bukit Chagar station in Johor Baru to Woodlands North, he said yesterday.

"We want to review the terms and conditions, and the Finance Ministry will look into how to reduce the cost of the project," said Mr Loke.

"But we are committed to continue with the project." - THE STRAITS TIMES