Malaysian Prime Minister Dr Mahathir Mohamad confirmed widespread speculation today and announced that Malaysia is pulling out if the KL-Singapore High Speed Rail (HSR) project. In a press meet today, Dr Mahathir said that the project will not benefit Malaysia which is over one trillion ringgit in debt, largely thanks to the scandalous 1MDB project launched by toppled leader Najib Razak.

Dr Mahathir said: “It is a final decision, but it will take time because we have an agreement with Singapore…It’s not beneficial. It’s going to cost us a huge sum of money. We’ll make no money at all from this arrangement. He added: “(The HSR) is only a short track. It is only going to save people one hour by taking the HSR.”

When asked whether the decision has been communicated to Singapore, Dr Mahathir told reporters, “I don’t know.” He added that Malaysia will discuss the issue with Singapore in the future.

The Ministry of Transport here has yet to respond to Dr Mahathir’s announcement. Helmed by Khaw Boon Wan, the Ministry had set aside S$3 billion in its budget for FY2018 for the Kuala Lumpur-Singapore High-Speed Rail (HSR) and the Johor Bahru-Singapore Rapid Transit System (RTS) Link.

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In December 2016, Singapore and Malaysia signed an agreement to build a multi-billion dollar, 350km high-speed rail link between the two countries. The HSR project has been a shot in the arm for developments in and around the Jurong Lake District area. But some have speculated that the election of Dr Mahathir and his coalition is likely to have a dampening effect on developments around the Jurong Lake District area.

Shortly after winning the election across the Causeway in a stunning upset, Dr Mahathir said that his government will find out how it can reduce the amount of money it has to pay to Singapore if it needs to drop the Singapore-Kuala Lumpur HSR project: “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.”

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Dr Mahathir’s announcement that Malaysia is definitely scrapping the project comes after he shared that the move is necessary to “avoid being declared bankrupt” in an interview with the Financial Times. The 92-year-old veteran politician said: “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 (US$28 billion) and will not earn us a single cent. That will be dropped.”

Dr Mahathir is also reportedly planning on holding discussions with the Chinese government about renegotiating “unequal treaties” such as the East Coast Rail Link – a Chinese-backed project that costs a whopping US$14 billion.

These initiatives are among the large projects and government agencies launched by Najib that were “not necessary at all”, according to Dr Mahathir. He added: “Mostly it was about trying to make the prime minister popular and it cost billions of dollars.”

While some Singaporeans expressed concerns that Malaysia pulling out of the HSR project will affect Singapore developments, more people here appear to have showered praise upon Dr Mahathir for taking such a stance. Some even urged Singapore Prime Minister Lee Hsien Loong to follow the lead of his counterpart across the causeway and scrap the Changi Airport Terminal 5 project:

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Mahathir fails to give a hard “No” to the HSR project