Kuala Lumpur - Malaysia has shelved plans for a bullet train linking Kuala Lumpur to Singapore because of the cost, a top planning official said on Tuesday.
The 8 billion ringgit (US$2.5 billion) project, proposed by Malaysian infrastructure and utilities group YTL Corp in 2006, aimed to cut travel time between the two cities to 90 minutes from seven-and-a-half hours presently.
"The letters on the decision were sent to parties such as YTL and the relevant agencies in early April," Economic Planning Unit (EPU) director-general, Sulaiman Mahbob, told Bernama news agency on Tuesday.
He said the government would have to bear a significant cost based on the financial model that was submitted by YTL.
"Based on the financial model submitted by YTL, the government has decided not to go ahead with the bullet train (project)," he said, without elaborating on the amount the government has to bear.
Officials of YTL had no immediate comment.
The idea for a high-speed train between Kuala Lumpur and Singapore, about 300 kilometres apart, dates back to the late 1990s, but was revived after the Malaysian government invited companies to submit ideas for privately funded projects.
The Malaysian government backed the project in 2007 after it passed a feasibility study, but said at the time it wanted to conduct a social impact study since the project would involve land acquisition.
News of the abandonment came shortly after Prime Minister Abdullah Ahmad Badawi said several infrastructure projects under the 200-billion ringgit (US$64 billion) 2006-2010 development plan may be delayed due to escalating costs.
Abdullah, who is also finance minister, said high on the casualty list is the construction of the three-billion-ringgit (US$826m) bridge linking the northern island of Penang to peninsular Malaysia.
Construction of the planned 24-kilometre bridge linking the town of Batu Maung on the island and Batu Kawan on the mainland was expected to be completed by January 2011 but has been hit by delays.
The construction of the bridge will be funded by the government and private investors and undertaken by United Engineers (Malaysia) Bhd (UEM), a major infrastructure player linked to the ruling United Malays National Organisation (UMNO). UEM`s foreign partner is the China Harbour Engineering Company.
Abdullah last September warned a spike in global oil prices could affect the country`s multi-billion-dollar development programmes. But in the run-up to the March 2008 polls, Abdullah launched five ambitious developments corridors nationwide to spur growth and eradicate poverty.
Last week, an independent think tank said Malaysia`s economy would decline in the second half of the year due to a downturn in the US economy, with growth in 2008 expected to reach 5.4 percent.
The central bank last month said Malaysia`s growth is expected to slow to 5.0-6.0 percent in 2008, down from 6.3 percent last year.
Source: www.channelnewsasia.com (23 April 2008)
