Malaysia and Singapore yesterday agreed to defer the construction of a planned high-speed rail link between the two nations to 2020, ending months of uncertainty surrounding a project that analysts expect to cost about US$17 billion.
Malaysian Prime Minister Mahathir Mohamad after his election in May said he intended to cancel the project in an effort to reduce the nation’s debt, but later said his government would negotiate a deferment.
In a joint statement, Malaysia and Singapore said they have agreed to suspend the construction of the high-speed rail link for a period up to May 31, 2020, and would look for ways to reduce costs.
Malaysia is to pay Singapore about S$15 million (US$10.88 million) by January next year for the deferment, Malaysian Minister of Economic Affairs Azmin Ali told a news conference.
It would be liable to pay more if the project does not resume in two years.
In July, Singapore said it would seek to recover more than S$250 million in costs incurred to date should Malaysia cancel the project.
The rail link, which would connect Kuala Lumpur and Singapore, is scheduled to commence services by January 2031 if construction starts by May 2020. It was originally expected to begin operating in December 2026.
Companies from China, Japan, South Korea and Europe have expressed interest in winning contracts to build, operate and finance the trains and rail assets, people close to the bidding process previously said.
The joint tender process is now to be called off.
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