Singapore-Kuala Lumpur Bullet Train Link Delayed by Four Years

(Bloomberg) -- A bullet train linking Singapore and Kuala Lumpur won’t be a reality for at least a decade as Malaysia’s Prime Minister Mahathir Mohamad seeks to pare his nation’s debt and review projects signed off by his predecessor Najib Razak.

The neighbors agreed to delay kicking off work on the 350-kilometer (218 miles), multibillion dollar link until the end of May 2020, while the first train isn’t likely to ply the route before January 2031, four years later than originally envisioned, according to a joint statement the two governments issued on Wednesday in Putrajaya, Malaysia.

Faced with liabilities of more than 1 trillion ringgit ($241 billion), Malaysia has been seeking ways to cut costs and has been pushing to postpone the project aimed at trimming the land journey time between the two cities to 90 minutes, from as long as five hours now. The ongoing international tender will be scrapped in a setback for potential bidders, including those from China and Japan that were keen to gain a slice of the orders.

As compensation for the delay, Malaysia will pay Singapore S$15 million ($11 million) before the end of January 2019, Malaysia’s Minister of Economic Affairs Azmin Ali said. Singapore’s Transport Minister Khaw Boon Wan said the two countries still remain committed to the project.

Mahathir, who returned to power in May after a surprise election win, has taken a firm stance against investments that he says don’t benefit Malaysians. In July, his government suspended the East Coast Rail Link, which was being built by China Communications Construction Co. with an estimated price tag of 81 billion ringgit. He has also indefinitely deferred a Trans-Sabah gas pipeline project backed by Chinese state companies.

©2018 Bloomberg L.P.