A multi-a billion-dollar high-speed connection between Singapore and Kuala Lumpur, the capital of Malaysia, has been terminated.
According to a joint statement on Friday, the two countries could not reach an agreement on the project after Malaysia sought changes due to the economic impact of the pandemic. Malaysia will have to reimburse Singapore for costs already incurred, the Ministry of Transport said in a separate statement.
The announcement comes just after a December 31 deadline for the second and final extension of the project suspension, which was first drafted a decade ago and received the green light in 2013. In June, Southeast Asian neighbors agreed to resume development, which has already led to several suspensions amid a discussion on costs.
The up-and-coming 350-kilometer highway connection would have reduced the travel time between the centers to about 90 minutes versus more than four hours by car. Although flying between the two only takes about an hour, it is much longer if the airport check-in and safety are taken into account. The service would begin in 2026.
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“In view of the impact of the Covid-19 pandemic on the Malaysian economy, the Malaysian government has proposed several amendments to the HSR project,” according to the joint statement by Prime Minister Muhyiddin Yassin and Prime Minister Lee Hsien Loong. “Both governments have had several discussions about these changes and have not been able to reach an agreement.”
Local media in Malaysia reported in November that Malaysia was considering ending the line in the southern city of Johor Bahru rather than in Singapore.
The government of former Malaysian Prime Minister Mahathir Mohamad, who resigned in February, tried to cancel the project because the country was struggling with debt and burdens of more than 1 trillion ringgit ($ 249 billion) before deciding to postpone and pay a S $ 15 million. ($ 11.4 million) compensation fee to Singapore.
Mahathir at one stage estimated that the project would cost about 110 billion ringgit for Malaysia.
“Both countries will meet their respective obligations and will now continue to take the necessary action as a result of the termination of the HSR agreement,” the joint statement read.
– Assisted by Tien Hin Chan and Hadi Azmi
(Updates with details from joint statement in fifth, last paragraphs.)