A Japanese company has withdrawn its bid for a high-speed rail construction project between Kuala Lumpur and Singapore in Malaysia due to concerns about a lack of financial support from the Malaysian government.
According to Japanese reports, interested companies, including JR East, had planned to implement Japan’s Shinkansen system in the project, but decided the investment was too risky without government support.
The $21 billion project faced several setbacks since it was first agreed between Malaysia and Singapore in 2013 and was canceled in 2020, but was revived in July last year.
Malaysia hopes to be able to fund its latest venture through private investment, rather than using public funds for construction.
Given Japan’s long-term interest in the initiative, including a visit in 2015 by then Transport Minister Keiichi Ishii to sell the Shinkansen system to stakeholders, Japanese companies abandoning high-speed rail would be a challenge. This raises further concerns about the project.
Along with JR East, trading company Sumitomo Corporation also expressed interest in supporting the project at the initial proposal stage.
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However, given the country’s recent involvement in the completion of Indonesia’s high-speed railway, and the construction of another high-speed railway underway in Thailand, Chinese companies are expected to replace the bidder.
The Malaysian government is scheduled to suspend bidding for the project on January 15, following a seven-month process, and negotiations with the Singapore government are expected to begin later this year once a list of candidates has been drawn up.
Singapore was previously forced to pay more than $76 million in compensation to the country for not complying with a previous agreement, but the island nation said it was open to talks in “good faith” in 2022. Stated.
