Malaysia to sign $880 mln rail deal with Singapore July 30, minister says

KUALA LUMPUR, July 21 (Reuters) - Construction of a $880 million light rail project linking Malaysia's southern state of Johor with neighbouring Singapore will begin next year, after both countries formalise the deal on July 30, Malaysia's transport minister said on Tuesday.

The Rapid Transit System (RTS) Link, as the project is known, was suspended last year after the former Malaysian administration led by Mahathir Mohamad pledged to tighten finances and review major deals.

The countries had earlier this year agreed to a July 31 deadline to finalise the project, after talks were hit by movement curbs to contain the spread of the coronavirus pandemic.

Malaysia's Transport Minister Wee Ka Siong said the agreement will be signed on the Johor Causeway - the main thoroughfare for land traffic between Malaysia and Singapore - in a brief ceremony to be witnessed by both prime ministers.

"Our expectation is by the end of 2026, we will see the start of RTS operations between Johor Bahru and Singapore," Wee said at a news conference in parliament.

Wee said the total cost of the project would be 3.75 billion ringgit ($880.28 million), including the construction of a maintenance depot which was not included in the earlier estimate.

Singapore is paying 61% of the costs and Malaysia 39%, a transport official said.

Mahathir had said in October that the project cost was cut by a third from about 4.93 billion ringgit to 3.16 billion ringgit after discussions between both countries.

In March, a new Malaysian government led by Prime Minister Muhyiddin Yassin was sworn in after Mahathir's sudden resignation.

($1 = 4.2600 ringgit)

(Reporting by Joseph Sipalan; Editing by Kim Coghill)

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