The Malaysian government said yesterday that it had reached "amicable agreement" with Singapore to defer the planned high-speed railway between the island city state and its capital, Kuala Lumpur, without immediate penalty.
Such a deferment would be a relief for Malaysia, which faced the possibility of hefty compensation after its new prime minister, Mahathir Mohamed, unilaterally canceled the project soon after his election in May this year.
Making the announcement, Malaysian Economic Affairs Minister Azmin Ali claimed Singapore would waive the penalty to which Malaysia was subject according to the contract it signed in 2016, when the two sides committed to the railway.
"After several discussions, the Singapore government has agreed to accept the views of the Malaysian government to defer the project for a period where we are confident that the Malaysian economy would improve by then," he said, reports Business Insider Singapore.
But the Singaporean side appears more guarded about the agreement.
Approached by Malaysia’s Bernama national news agency, Singapore’s Ministry of Transport said both sides were in discussions on Malaysia’s request to defer the project, and that it "hoped to reach a mutually acceptable outcome soon".
Reports of the latest development suggested Malaysia would be allowed a grace period to improve its finances, after which the project will be restarted. If this does not happen, then Malaysia will have to pay damages to Singapore, which has already spent about $180m on setting up the project and buying land.
With his country’s finances under strain, Mahathir said in May that the decision to cancel the railway was needed to "avoid being declared bankrupt".
The $27bn link was intended to cut travel time between the two cities to just 90 minutes. At present there is no direct rail line, and travellers from Sentral station in Kuala Lumpur have to change in Gemas and Johor Bahru (pictured).
One website for tourists advises that the seven-hour trip is a good idea only if you are "really a fan of trains".
Image: Johor Bahru: all change for Singapore (Creative Commons)