FILE PHOTO: Malaysia's Prime Minister Mahathir Mohamad speaks during an interview with Reuters in Putrajaya, Malaysia June 19, 2018. REUTERS/Lai Seng Sin/File Photo

KUALA LUMPUR (Reuters) - Malaysia will look to negotiate the deferment of a high-speed rail project with Singapore, Prime Minister Mahathir Mohamad said on Thursday.

Mahathir said previously he would cancel the rail link between Kuala Lumpur and Singapore, and would talk with Malaysia’s southern neighbor about any compensation that has to be paid.

“The problem is that if we just unilaterally discard the agreement, we have to pay a very high compensation,” Mahathir told reporters in parliament on Thursday, adding that given Malaysia’s financial situation, the project has to be deferred.