Singapore and Malaysia announced Friday their decision to scrap their plan for a high-speed rail line between the two countries after negotiations to resume the twice-delayed project collapsed.
The two sides had been negotiating changes to the Kuala Lumpur-Singapore High Speed Rail project that Malaysia had requested in the hope of reaching an accord before a year-end deadline.
"Both governments had conducted several discussions with regard to these changes and had not been able to reach an agreement. Therefore, the HSR Agreement had lapsed on 31 December 2020," Singapore Prime Minister Lee Hsien Loong and his Malaysian counterpart Muhyiddin Yassin said in a joint statement.
The project originally called for building a 350-kilometer-long high-speed rail that would have cut travel time between Kuala Lumpur and the city-state to just 90 minutes, compared with over four hours by car.
Malaysia must compensate Singapore for costs incurred in implementing the project. The amount was not specified on Friday, but Singapore's parliament is expected to discuss the issue when it meets on Monday.
In February 2013, Lee and then Malaysian Prime Minister Najib Razak announced their agreement to build the high-speed rail.
A bilateral agreement to build the line was signed in December 2016, after which the tender process attracted the interest of bidders from many foreign countries, including Japan.
But the project was subsequently suspended for two years at Malaysia's request after Najib's government was toppled in the May 2018 general election and the new government vowed to review or renegotiate big bilateral deals.
In May last year, Malaysia sought changes to the project and requested a final, seven-month extension of the suspension period to allow both sides to discuss the proposals.
One of the main sticking points in their discussions was Malaysia's request for the line to be extended to its international airport near Kuala Lumpur, but Singapore rejected this idea because it would be a threat to its status as an aviation hub, according to Malaysian news reports.