KUALA LUMPUR (May 28): The decision to drop plans to build the high-speed rail link between Kuala Lumpur and Singapore is final, Prime Minister Tun Dr Mahathir Mohamad said, adding that it could see Malaysia facing up to RM500 million in penalty.

Speaking to reporters after chairing Parti Pribumi Bersatu Malaysia’s meeting today, the Prime Minister said he has yet to verify whether the 500 million amount would be in ringgit or Singapore dollars, or any other currency for that matter.

“I have not seen the [terms of the] KL-Singapore high-speed rail (HSR) agreement, but I am told that we may pay as much as RM500 million in compensation (for scrapping the deal)...we will try to manage it at the least cost possible,” he said.

“I have yet to verify (whether the penalty would be denominated in ringgit), but I suppose it will be in ringgit,” he added.

When asked if scrapping the project is a final decision from the Pakatan Harapan government, Dr Mahathir said yes.

"The HSR...it is only a short track. It is not beneficial to us," he said.

In an interview with the Financial Times published today, Dr Mahathir was quoted as saying that Malaysia "needs to do away with some of the unnecessary projects, for example the high-speed rail, which is going to cost us RM110 billion and will not earn us a single cent. That will be dropped".

On April 5, MyHSR Corp Sdn Bhd had announced that the consortium of Malaysian Resources Corp Bhd and Gamuda Bhd had been selected as project delivery partner (PDP) for the northern portion of the KL-Singapore HSR project alignment, while another consortium by the name of Syarikat Pembenaan Yeoh Tiong Lay Sdn Bhd-TH Properties Sdn Bhd had been selected for the southern part.

The PDPs will be responsible for the designing and delivery of KL-Singapore HSR's civil works at an agreed cost and schedule.

Eight stations were being planned for the KL-Singapore HSR project, namely Bandar Malaysia, Sepang-Putrajaya, Seremban, Melaka, Muar, Batu Pahat and Iskandar Puteri stations in Malaysia, and the Jurong East station in Singapore. Operations of the KL-Singapore HSR service was targeted for commencement by Dec 31, 2026.

The HSR project would cut travel time between Singapore and Kuala Lumpur to 90 minutes, compared with more than four hours by car.