The border crossing between Singapore and Malaysia is one of the world’s busiest. Around 350,000 travelers and 100,000 vehicles try to cross the border each day, leading to queues and traffic jams that can last for hours between Singapore and Malaysia’s Johor state.
For years, the two countries have considered an ambitious project that would significantly cut that travel time: a 350-kilometer high-speed rail line between Singapore and Kuala Lumpur, Malaysia’s capital. The train could make the journey in just 90 minutes, compared to four hours by car. (A flight between the two cities takes about an hour.)
But the high-speed rail has been bogged down by financing issues since it was first proposed in 2013.
This week, Malaysian Resources (MRCB), a Malaysian conglomerate that ranks No. 429 on Fortune’s Southeast Asia 500, pulled out of a consortium of companies bidding for the high-speed rail project. The decision was revealed in a statement by Berjaya Corporation, a member of the consortium, shared with Malaysia’s state news agency Bernama. According to the statement, MRCB withdrew to pursue other strategic opportunities.
The consortium includes Berjaya Rail, Keretapi Tanah Melayu, IJM Corp. and technical partners such as Deutsche Bahn, Hitachi Rail, and Hyundai Rotem. Berjaya’s founder, Vincent Tan, said the group “remains steadfast in our mission to deliver a world-class HSR system that will transform regional connectivity and economic development for Malaysia.”
MRCB did not immediately respond to Fortune’s request for comment. Shares of MRCB were down 2.9% on the Malaysia stock exchange on Thursday.
The high-speed rail project
Malaysia and Singapore first agreed to build the 350-kilometer line in 2013, and signed a bilateral agreement in 2016. Train services were meant to commence by 2026.
Yet the project has been in limbo for years, due to politics and the railway’s estimated cost, which could reach as high as $22.2 billion.
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The project was first agreed between Singapore’s prime minister Lee Hsien Loong and Malaysia’s prime minister Najib Razak. In 2018, Mahathir Mohamed defeated Najib in elections, and subsequently questioned the railway’s cost.
Malaysia delayed the project, then ultimately terminated it in 2021.
But current prime minister Anwar Ibrahim, who took office in 2022, is interested in resuming the project. In July, transport minister Anthony Loke indicated that the government is still considering plans for the high-speed railway, and suggested to Bloomberg Television that Malaysia would make a decision on the project by the end of the year.
Malaysia’s king, Ibrahim Iskandar, is also eager to revive the high-speed rail project. Ibrahim is the sultan of Johor, the Malaysian state that borders Singapore. (Malaysia’s king is chosen every five years among the sultans of its various federal states.) King Ibrahim’s daughter, Aminah Sultan Ibrahim, is the chairwoman of Berjaya Rail.
Malaysia and Singapore are likely to sign an agreement next month that will implement a new “special economic zone” across the border to facilitate the movement of goods and talent. Previously, King Ibrahim asked for the proposed high-speed rail to travel through Forest City, a development designated as a “special financial zone” to attract foreign investment and family offices. The project is backed by the embattled Chinese developer Country Garden.