Johor Umno Youth chief Mohd Hairi Mad Shah said the government's decision to terminate the Kuala Lumpur-Singapore High Speed Rail (HSR) was tantamount to "killing" Johor's economy.
Hairi said the HSR project would have spurred development in three districts in Johor and demanded Putrajaya to provide detailed reasons over the about-turn.
"A few months before the tabling of Budget 2021, the prime minister in a speech to the local community in Pagoh had even proudly announced that the project would proceed so why the U-turn?" he said.
Prime Minister Muhyiddin Yassin and his Singapore counterpart Lee Hsien Loong, in a joint-state on Jan 1, announced the termination of the project.
This was after Malaysia requested several changes to the project which Singapore rejected.
Minister in the Prime Minister's Department Mustapa Mohamed said the changes were necessary as Malaysia's economy had been impacted by the Covid-19 pandemic and was no longer capable of proceeding with the HSR in its original form.
Malaysia will have to compensate Singapore for the cancellation but both governments did not reveal the exact figures.
Business portal The Edge Markets estimated the compensation to be around RM300 million.
Hairi said the RM300 million could have more than covered Johor's budget for next year, which is at RM248.14 million.
"The impact of the HSR cancellation does not only affect Malaysia's reputation and investor confidence but also has microeconomic effects on the people particularly in Johor," he added.
He questioned what would happen to the development plans in Muar, Batu Pahat and Iskandar Puteri where the stations were supposed to be built.
"People have purchased commercial lots and residences due to the HSR. What will happen to them?
"What about the 70,000 job opportunities that will be lost from the cancellation?
"What about the business opportunities for bumiputera small contractors who would have benefitted from the economic spillover effect had the project proceeded?" he said.
The government indicated that it was considering a scaled-down version of the HSR from Kuala Lumpur to Johor Bahru instead.
However, it has been criticised as it will overlap with the KTM line which is undergoing a double-tracking upgrade.
Hairi urged the government to explain the financial implication of having to pay RM300 million to Singapore and also the development plans for Johor in the absence of the HSR.