Malaysia's new government has called into question the future of multibillion-dollar rail projects since Tun Dr Mahathir Mohamad took power in May. Now it appears to be ready to proceed with at least one.

The Malaysian cabinet has given in-principle approval for a rail project linking Johor Baru in the southernmost tip of the country with Singapore, Malay Mail Online said in a report citing Transport Minister Anthony Loke. It is still looking at costs and other details.

This project was delayed by two months due to the general elections, which saw Mahathir become prime minister. A known Singapore critic, Mahathir has wanted to cancel a proposed multi-billion dollar high-speed railway connecting the city-state to Kuala Lumpur as it was too expensive while saying it may happen in the future.

Mahathir's stance prompted Singapore's Transport Minister Khaw Boon Wan to tell parliament on July 9 that his government will seek compensation for all costs incurred if Malaysia cancels the 350-kilometre railway link between the two countries.

For now, it seems to be a go for the 4-kilometre rail line, which will be able to transport 10,000 travellers in one direction every hour between Singapore and Johor Baru.

The two neighbours will set up a joint company for the project after the full approval is given by Malaysia.