Malaysia to compensate Singapore $125.7 million for costs on scrapped high-speed railway project

Malaysia may have to pay as much as $125.7 million for costs already incurred by Singapore for a high-speed rail line after the two countries scrapped the project due to disagreement on Malaysia's proposed changes.

The changes became necessary for Malaysia due to the impact of the COVID-19 pandemic on its economy.

The 350-kilometer rail network was expected to cut travel time between Singapore and Kuala Lumpur from four or more hours by car to just 90 minutes.

The two countries signed the bullet train line deal in 2016, but Malaysian Prime Minister Mahathir Mohamad, who was elected two years later, wanted to scrap the project in efforts to review infrastructure projects approved by his predecessor.

Mahathir also wanted to cut Malaysia's debt as he had estimated in 2018 that the railway would cost his country around $27 billion.

Construction was suspended for two years at Malaysia's request, with plans to commence service in 2031.