The planned Singapore-Malaysia high speed rail link could be among the first major high cost infrastructure projects to be ditched by the new Malaysian government.
Prime Minister Mahathir Mohamad has promised to scrap the project.
"It’s not beneficial. It’s going to cost us a huge sum of money and we’ll make no money at all from this operation," Mahathir said.
Scrapping the project may be easier said than done, the PM acknowledged.
"Of course we have to talk to Singapore, we have an agreement with them."
Malaysia and Singapore signed a deal in 2016 to build the landmark rail project, which would have cut overland travel time to 90 minutes from the current five hours by road.
There is huge daily demand for travel between KL and Singapore and if it is scrapped the only winners will be airlines such as AirAsia and Malaysian Airlines.
The short KL-Singapore flight is the busiest international air route in the world.
Singapore says it has not officially been notified of the decision and under the terms Malaysia may be forced to pay RM500 million in compensation.
The HSR project has a construction budget of RM110 billion.
The new KL government is looking closely at all major contracts agreed by former PM Najib Razak who is embroiled in the 1MDB scandal where RM30 billion of state funding disappeared during his tenure.
