Malaysia PM Mahathir Mohamad to drop high-speed rail project with Singapore

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"Every former prime minister has certain entitlements, but the number of members on duty will not be the same as before, and we are only following the set standard operating procedures (SOPs)".

Malaysia's unilateral decision not to proceed with construction means it may now have to compensate Singapore.

Most of the line - 335km of it - will be in Malaysia, with the remaining 15km in Singapore.

Malaysia is cancelling a project to build a high-speed rail link between its capital, Kuala Lumpur, and Singapore, and will talk with its southern neighbor about any compensation Malaysia has to pay, Prime Minister Mahathir Mohamad said on Monday.

BN and its predecessor the Alliance Party had governed Malaysia for 61 years, but saw its hold on power abruptly come to an end when Malaysians voted in the new Pakatan Harapan federal government in the 14th general election.

On May 12, the Malaysian government's delivery vehicle for the high-speed project, MyHSR, released a statement congratulating Mahathir Mohamad on being sworn in as the country's seventh prime minister.

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The 350-km HSR project with the Singapore portion covering 15 km - was scheduled to be completed by 2026. "That will be dropped", Mahathir told the Financial Times.

"We have to talk with Singapore about dropping that project", he said.

Najib said at the time: "One can have breakfast in Kuala Lumpur, lunch in Singapore, and be back in time for dinner in Kuala Lumpur".

Dr Mahathir had previously said there were high financial penalties to be incurred for withdrawing from the project and that Malaysia would seek to establish how to reduce those costs. A year on, the project has failed to attract any buyers.

Early this month, Mr Mohd Nur Ismal Mohamed Kamal, chief executive of MyHSR Corporation, the state firm tasked with implementing the HSR on the Malaysian side, estimated that Malaysia could lose RM209 billion in gross national income if the project was scrapped.

Dr Mahathir has also said his government was haggling with Chinese partners over the terms of a $10.4 billion rail deal aimed at connecting the South China Sea at the Thai border in the east with the strategic shipping routes of the Straits of Malacca in the west.

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