Malaysia says it will axe high-speed railway to Singapore

KUALA LUMPUR, Malaysia — New Malaysian Prime Minister Mahathir Mohamad said Monday that a planned high-speed railway that would cut travel time between Kuala Lumpur and Singapore to just 90 minutes will be axed because it isn't beneficial.

Mahathir said the 350-kilometer (218-mile) rail project slated to be completed by 2026 is too costly.

"It is a final decision, but it will take time because we have an agreement with Singapore," Mahathir said. "It is not beneficial. It is going to cost a huge sum of money. We will make no money at all from this operation."

The two countries signed an agreement in December 2016 to build the rapid rail line with speeds of over 300 kilometers an hour and dubbed a "game-changer" that will boost connectivity and strengthen economic ties between the neighbors. Currently, it takes at least four hours to travel by car.

Mahathir said Malaysia may have to pay a penalty and will discuss the matter with Singapore, adding that "we will try to manage it at the least cost possible."

Mahathir's alliance won a stunning victory in May 9 elections to oust scandal-tainted former Prime Minister Najib Razak and end his coalition's 60-year grip on power.

The new government has said it will review large-scale infrastructure projects, including Chinese investment, to cut costs after revealing that national debt and liabilities was over a trillion ringgit ($251 billion), or 80 percent of gross domestic product, taking into account government guarantees and other payments.

The huge debt is partly due to a massive corruption scandal at the 1MDB state investment fund set up by Najib that led voters to abandon him, and sparked investigations in the U.S. and several other countries. U.S. investigators say Najib's associates stole and laundered at least $4.5 billion from the fund.

Mahathir has reopened an investigation into 1MDB that was suppressed during Najib's rule. Najib, who denies any wrongdoing, and his wife have been barred from leaving the country.