(AFP) The government will spend "billions" on a high speed electrified railway linking it to Singapore in the south and Thailand in the north, Prime Minister Dr Mahathir Mohamad said today.

The track would be part of an ambitious pan-Asia link which is also expected to boost efforts to make Malaysia a regional shipping hub.

Mahathir was speaking at the opening of a link project, which cost RM500 million, stretching 31.5-kilometres from Kulai in Johor state to the Port of Tanjung Pelepas (PTP).

Even though the whole scheme would cost "billions of ringgit", it would be a good investment and contribute towards developing the economy, he was quoted as saying by the official Bernama news agency.

"It will take some time to complete and will incur a huge cost but I think it is a wise investment."

Mahathir said once the electric rail project was completed, travelling time between Kuala Lumpur and Singapore would take about two hours 30 minutes compared to about seven hours now.

At present a slow rail system constructed during British colonial days and managed by national railway firm Keretapi Tanah Melayu plys the two points and is often plagued by derailment.

Timely boost

V Muthiah, president of the Federation of the Malaysian Shipping Association, hailed the announcement.

"Definitely we welcome the project. It is timely. It will surely boost Malaysia's plan to emerge as a regional shipping hub," he told AFP.

Muthiah said with a new, fast and efficient rail service, more cargo could be transported quickly in and out of Thailand and countries in the Mekong basin to ports in Malaysia.

"We hope the project will be completed quickly. It is good news for the shipping industry," he added.

Mahathir last week said the government planned to expand all its ports to make the country a regional trade and shipping hub.

"We want to expand all our ports, not just PTP. We are as strategic as Singapore ... There is no reason why we cannot be a hub for trade and shipping in the region," Mahathir said.

Southeast Asian leaders have agreed to a pan-Asia rail project that would link Singapore and Kunming, in southern China, to form an integral part of an ambitious Mekong basin development plan.

The 5,500-kilometre railway project, to be implemented in stages, is due to be completed in 2006.