Singapore and Malaysia terminate multibillion dollar high-speed rail project

Kuala Lumpur, Malaysia (Urban Transport News):  Due to the economic impact of the COVID-19 pandemic, Singapore and Malaysia terminated a multibillion-dollar high-speed rail project after the two countries failed to reach an agreement.

A US$15 billion high-speed rail project was planned to connect the 350 km stretch between the two capitals in just 90 minutes. The on-off project, first given the green light in 2013 under the leadership of former Malaysian Prime Minister Najib Razak, was intended to boost cross-border business and development of areas along the track. Global Railway manufacturers and operators from Japan, China and Europe expressed interest in the project.

Malaysia Government requested the suspension of the mega infrastructure project as part of the government's fiscal reforms just after Mahathir Mohamad became prime minister in 2018. The two governments suspended the high-speed rail project in September 2018.

Commenting on the decision, Malaysian Prime Minister Muhyiddin Yassin and Singapore Prime Minister Lee Hsien Loong said in the joint statement:

In light of the impact of the COVID-19 pandemic on the Malaysian economy, the government of Malaysia had proposed several changes to the [high-speed rail] project. Both governments had conducted several discussions with regard to these changes and had not been able to reach an agreement.

Singapore's transport ministry said in a separate statement on 1st January 2021 that the two prime ministers had a video conference on 2nd December 2020 to review the status of the project. "Malaysia has since allowed the [high-speed rail bilateral agreement] to be terminated, and has to compensate Singapore for costs already incurred by Singapore," said the statement.

The two countries have close economic relationships, with the Singapore-Kuala Lumpur route being one of the world's busiest international flight routes before the COVID-19 pandemic.

"Both countries remain committed to maintain good bilateral relations and cooperate closely in various fields, including strengthening the connectivity between the two countries." the prime ministers said in the joint statement.