*This story was updated at 10.20pm on 28 May 2018 to reflect the Ministry of Transport’s official response to Malaysian Prime Minister Mahathir Mohamad’s announcement on the HSR project.
Malaysian Prime Minister Mahathir Mohamad has pledged to scrap the Kuala Lumpur-Singapore high-speed rail (HSR) project as part of cuts to government spending, in order for Malaysia to “avoid being declared bankrupt”.
In an interview with the Financial Times on Monday (28 May), the 92-year-old said the nation’s financial situation was his government’s top priority.
“We need to do away with some of the unnecessary projects, for example the high-speed rail, which is going to cost us RM110 billion (S$37 billion) and will not earn us a single cent. That will be dropped.”
“We have an agreement with Singapore. We have to talk with Singapore about dropping that project,” added Mahathir, who also served as Malaysia’s prime minister from 1981-2003. The multi-billion dollar HSR was scheduled to be completed in 2026.
Newly appointed Malaysian Finance Minister Lim Guan Eng said last week that the nation’s total government debt, including liabilities from the scandal-hit 1Malaysia Development Berhad (1MDB) state fund, had spiralled to more than RM1 trillion, or 80 per cent of gross domestic product.
Responding to queries from Yahoo News Singapore, a Ministry of Transport spokesperson said that Singapore has not yet received any official notification from Malaysia on the HSR project.
“We had agreed to proceed with the HSR project based on mutual benefits and obligations set out in the HSR bilateral agreement. We will wait for official communication from Malaysia,” said the spokesperson.
Yahoo News Singapore has also reached out to Singapore’s Foreign Affairs for comment.