Singapore is expected to accept an extension of the deadline to proceed with construction of the Malaysia-Singapore High-Speed Rail (HSR)
Singapore is expected to accept an extension of the deadline to proceed with construction of the Malaysia-Singapore High-Speed Rail (HSR) line, originally scheduled for today.
The HSR, a planned 350-kilometre line stretching from the Malaysian capital of Kuala Lumpur to Singapore, is expected to significantly increase long-term business and tourism ties by drastically reducing travel time between the two countries.
The rail line was initially agreed upon in 2013 but was suspended for two years in 2018 after Malaysian PM Mahathir Mohamad slashed short-term government spending to reduce the country’s national debt. Malaysia recently requested an extension of the deadline to review cost-reduction options, such as rerouting and reducing train speed.
While Mahathir resigned as PM in February, concerns over Malaysia’s national debt and fiscal deficit were inherited by his successor, Muhyiddin Yassin. Malaysia’s budgetary problem has been exacerbated by the COVID-19 outbreak; both leaders passed large stimulus packages, which further widened Malaysia’s budget deficit by reducing taxes and freezing loan payments. The HSR is expected to continue in some capacity—if Muhyiddin cancels the project entirely to reduce government spending, Malaysia will be legally obligated to reimburse all of Singapore’s costs, which could total in the billions.
Muhyiddin’s approval of other long-term infrastructure projects like the East Coast Rail Link (ECRL) as well as his commitment to “fiscal space for the long term” indicates that he will likely support a more cost-efficient version of the HSR.
Wake up smarter with an assessment of the stories that will make headlines in the next 24 hours. Download The Daily Brief.