A high-speed rail link between Singapore and the Malaysian capital Kuala Lumpur is expected to cause a decline in air traffic.
The governments of the two countries have agreed to build the link, which will cut travelling time to just 90 minutes with six stops for the 400km route.
Flights take 45 minutes, while the journey by train takes six hours at present and five hours by road.
Malaysia and Singapore have also agreed on a rapid transit system linking the island republic’s mass rapid transit system with Johor Baru at the southern tip of the Malaysian Peninsula, across the Johor Straits.
The two mass ‘people mover’ projects are part of multi-billion dollar business deals between the countries.
The KL-Singapore air route is currently served by six airlines from the Kuala Lumpur International Airport (KLIA), 70km from the city, with a total of 36 flights daily.
There are also seven flights a day from the Sultan Abdul Aziz Shah Airport 25km outside Kuala Lumpur.
Malaysian Prime Minister Najib Razak told a media briefing that the HSR would be built via public-private partnership with strong government participation from both countries.
“It will be on the basis of private sector funding with the two governments providing structural support and participation,” Najib said.
An estimated investment of $10bn is required for the project.
It will be faster to travel by HSR between the two points than by air, taking account of waiting time and the road journey to the airport.
According to Maybank Research's China/Hong Kong aviation analyst, Andrew Orchard, China HSR services for city pairs less than 500km apart have caused average airline capacity to fall 47 per cent.
A consortium led by the politically-influenced United Engineers Malaysia (UEM) Group and Ara Group is proposing to put in a bid for the project using magnetic levitation (Maglev) technology.
Apart from the transit HSR service, the consortium is also proposing a non-stop service that would take 55 minutes with trains running a speed of 430km/h.
According to the CEO of the Land Public Transport Commission (LPTC) in Kuala Lumpur, Mohd Nur Ismail Mohamed Kamal, tenders would be called in December.
Mohd Nur expects a string of foreign companies from Japan, China and Germany that are involved in the production of HSR equipment to submit tenders.
LPTC is the lead agency appointed by the Malaysian government for the project. The line is expected to boost tourism and bring economic benefits to both countries.