Mahathir axes high-speed rail link with S’pore

Malaysian Prime Minister Mahathir Mohamad yesterday said he was scrapping a project to build a high-speed railway to Singapore, in an ominous sign for the neighbours' famously fractious relationship.

Mahathir, who won a surprise election victory this month against Najib Razak's long-ruling coalition, is seeking to repair the country's finances which he says deteriorated dramatically after the former government became embroiled in a huge financial scandal.

The leader said it was a "final decision" to scrap plans for the bullet-train line between Kuala Lumpur and Singapore, which had been agreed on several years ago and was expected to cut travel times to 90 minutes from five hours by road today.

"It's not beneficial. It's going to cost us a huge sum of money, we'll make no money at all from this operation," the 92-year-old said.

Mahathir said he was not sure how long his decision would take to implement, adding: "Of course we have to talk to Singapore, we have an agreement with them."

Asked if Singapore had been informed of his decision, he said: "I don't know."Malaysia, he said, may have to pay as much as 500 million ringgit ($125.7 million) in compensation.

Singapore's transport ministry did not immediately respond to requests for comment.

The development will alarm the Singapore government, which is watching to see whether the return of Mahathir -- whose relationship with the city-state was famously prickly during his first stint as premier from 1981-2003 -- might cause ties to worsen.