In this file photograpg dated July 19, 2016, Malaysia's Minister in the Prime Minister's Department Abdul Rahman Dahlan (right) and Singapore's Minister of Transport Khaw Boon Wan sign documents as Malaysia's Prime Minister Najib Razak (second right) and Singapore's Prime Minister Lee Hsien Loong (second left) look on, during a ceremony concerning a new Kuala Lumpur-Singapore high-speed rail link, at Najib's official residence in Putrajaya, outside Kuala Lumpur. The prohject was scrapped on according to a joint statement issued on Jan 1, 2021. (MOHD RASFAN / AFP)

A multi-billion-dollar high-speed rail link between Singapore and Malaysia's capital Kuala Lumpur has been terminated.

The two countries were unable to reach an agreement on the project after Malaysia sought changes because of the pandemic's economic impact, according to a joint statement Friday. Malaysia will have to compensate Singapore for costs already incurred, the city-state's transport ministry said in a separate statement.

The announcement came just after a Dec 31 deadline for the second and final extension of the suspension of the project, which was first mooted a decade ago and given the green light in 2013

The announcement came just after a Dec 31 deadline for the second and final extension of the suspension of the project, which was first mooted a decade ago and given the green light in 2013. In June, the Southeast Asian neighbors had agreed to put the development, which has already incurred multiple suspensions, on hold again amid a discussion around costs.
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The on-again, off-again 350 kilometer high-speed rail link would have cut travel time between the centers down to about 90 minutes versus more than four hours by car. Although flying between the two only takes about an hour, that's a lot longer once airport check-in and security is taken into account. The service was due to start in 2026.

"In light of the impact of Covid-19 pandemic on the Malaysian economy, the Government of Malaysia had proposed several changes to the HSR project," according to the joint statement by Prime Minister Muhyiddin Yassin and Prime Minister Lee Hsien Loong. "Both Governments had conducted several discussions with regard to these changes and had not been able to reach an agreement.”

Local media in Malaysia reported in November that Malaysia was considering ending the line in its southern city of Johor Bahru rather than in Singapore.

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The administration of former Malaysia Prime Minister Mahathir Mohamad, who resigned in February, sought to cancel the project as the country grappled with debt and liabilities amounting to more than 1 trillion ringgit (US$249 billion), before settling for a deferment and a S$15 million ((US$11.4 million) compensation fee to Singapore.

Mahathir had at one stage estimated the project would cost around 110 billion ringgit for Malaysia.

"Both countries will abide by their respective obligations, and will now proceed with the necessary actions, resulting from this termination of the HSR Agreement," reads the joint statement.