Mahathir Vows To Scrap KL-Singapore High Speed Rail Project
Dr Mahathir has finally made known his preference regarding the Kuala Lumpur-Singapore High Speed Rail (HSR) project.
And it’s bad news for Singaporeans.
He has vowed to scrap the multibillion-dollar endeavour in an exclusive Financial Times interview on Monday (28 May).
Dr Mahathir also outlined his struggle to execute major cuts to government spending – including 10% pay cuts for ministers – to ensure Malaysia may “avoid being declared bankrupt”.
Well, we’re sorry to dash the hopes of avid Singaporean shoppers who were hoping to reach KL in just 90 minutes from Jurong East.
But let’s hear him out first.
Unnecessary project that won’t “earn…a single cent”
Malaysian Prime Minister (PM) Mahathir cited the high costs of what he deemed an “unnecessary project”, at RM110 billion (S$37 billion).
As he mused that it would not “earn…a single cent”, thereby justifying his call to drop the project.
The total government debt racked up from the 1MDB fund has come up to RM1.09 trillion (S$366.8 billion), added newly minted Finance Minister Mr Lim Guan Eng.
To put that into perspective, that’s 80% of Malaysia’s GDP.
Will talk to Singapore about dropping HSR
However, Dr Mahathir did offer a carrot at the end of his stick.
He acknowledged Malaysia’s previous agreement with Singapore regarding the high-speed rail project.
And promised that his government would follow the rule of law and honour existing contracts, musing,
We have an agreement with Singapore. We have to talk with Singapore about dropping that project.
Originally scheduled for completion in 2026, construction was estimated to cost between US$13-15 billion (S$17-20 billion).
Slamming Najib’s decisions
In the same vein, many of ex-PM Najib’s large projects and government agencies were “not necessary at all”, according to PM Mahathir.
He called them attempts to “make the prime minister popular”, at the expense of “billions of dollars”.
Amid calls to restore democracy to the country, he vowed to prevent such abuses in the future by making sure no single person can “dominate the system” the way Mr Najib did.
In a parting statement, Dr M added that Malaysia would renegotiate “unequal treaties” with China as well, like the US$14 billion (S$18 billion) East Coast Rail Link.
Although he did not admit to any “major past mistakes” as Malaysia attempts to solve its fiscal problems.
Populist policies despite debt-curbing
As PM Mahathir tries to fulfill his other campaign promises – like dropping highway tolls and increasing fuel subsidies – experts worry that the debt-curbing may be impacted.
Taking scrapping Goods and Service Tax (GST) for example.
A move that would cost Malaysia US$12 billion (S$16 billion) or up 1/5 of the state’s revenue.
Such a pity
As can be seen, Dr M does seem like a man of action.
With his iron-clad will to reform a “tainted” civil service, he’s even stated that he’ll sack 17,000 political appointees, to stamp out corruption.
Therefore, the future of our long-awaited SG-KL HSR kinda looks bleak for now.
We do think it’s a major pity though, if the deal falls through, since bidding has already begun.
Featured image from myHSR.