Commentary Economics

MRT, the overlooked NKEA

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TheMole
Written by TheMole

May 26, 2017

By Salahuddin Hisham

THE Government has released the 2016 Annual Report on the National Transformation Plan on Tuesday. There was a list of statistics released to show achievements in reaching the targeted outcome.

One particular National Key Economic Area (NKEA) project did not receive a fair share of glory, for lack of a better description. The reason can only be expected as the project is not fully operational as only part of the first line is open for public use.

Salahuddin Hisham was involved in various financial markets but has since, turned political and online.

Salahuddin Hisham was involved in various financial markets but has since, turned political and online.

However, the Klang Valley Mass Rapid Transit (MRT) project under the entry point project (EPP) under the greater Kuala Lumpur/Klang Valley NKEA needs to be highlighted as its achievement is left under-rated.

There must be something special and worthy to be made known of this public project that could be delivered on schedule and without cost overrun.

Not only that, it came with a saving of RM2 billion from the original budget of RM23 billion. This is despite the winner of the contract having to undergo a Swiss challenge bidding process i.e. unsolicited bid for public project provided to the government is published and third parties invited to match or exceed it.

Tony Pua, Rafizi Ramli and other young opposition politicians failed disastrously to nitpick on the contract or it’s pricing.

How atrocious could they be to claim the first line is more expensive than the ones in Seoul and Barcelona.  Or it has more than tripled in cost to RM100 billion for the first MRT line.

Building an urban public transportation can be costly as it involves a lot of tunnelling and is prone to cost overruns. Singapore faced a cost overrun for their Downtown line of the MRT.

The final cost turned out to be SGD20.7 billion or SGD990 million per km or RM3.07 billion per km when fully completed. This is despite Singapore’s long experience in building MRT lines.

Malaysia’s first MRT line is scheduled to cost RM21 billion for 51km or RM411 million per km. To be fair to Singapore, no two public mass transportation projects can be directly comparable.

Failing to pick on the cost, a financial weekly is trying to find an angle to question EPF for subscribing the right issue of a capable public project developer.

Get the numbers right. With the size of EPF fund size and amount invested with the group, it is still a small percentage that could hardly be considered over exposure to a group of companies.

The planning for the 51km line started in 2010 and the first phase covering 12 stations opened last  December 16t 2016. By July 2017, the second phase will be completed.

MRT will be fully operational and capable of servicing 520,000 passengers. The line can carry 20,000 passengers per hour per direction, and is expected to have a ridership of 400,000 passengers per day.

There are three lines for the MRT system – MRT Sungai Buloh-Kajang (SBK) Line; MRT Sungai Buloh-Serdang-Putrajaya (SSP) Line; and MRT 3 or Circle Line.

The MRT will radically improve and transform Kuala Lumpur’s poor and sorely inadequate public transportation coverage.

Past public transport rail line seemed planned to promote a certain destination of development project and open up new development prospects in the Klang Valley. MRT is a more serious effort to move the population by passing through densely populated areas  

Property consultancy Savills Malaysia managing director Datok Paul Khong was quoted in The Star recently saying:

“This time around, the MRT got it right by connecting all the heavily populated areas like Cheras, Maluri and Kajang to the affluent established residential neighbourhoods of Damansara Heights, Taman Tun Dr Ismail and Mutiara Damansara to the commercial locations such as the Tun Razak Exchange and Bukit Bintang.”

It will increase Greater Kuala Lumpur’s rapid rail network from 15 km per million people in 2010 to 40 km per million people once completed.

The proposal will increase rail ridership by five-fold to be in line with government’s target for public transport usage in the Klang Valley of 40per cent by 2020 from 18 per cent in 2009.

The current phase of public transport rail development extended the Putra Line to many more stations and serious efforts embarked to integrate all the rail lines.

 It may be a bit of a cliché to claim MRT could turn Kuala Lumpur one of the world’s top 20 cities in terms of economic growth and livability. It is certainly an enabler.

The phase 1 is expected to be operational in 2021, four years away. The entire line to be completed by 2022.

The MRT highlighted what Prime Minister Datuk Seri Najib Razak had said about the benefit of holistic planning.

The government promoted public transportation but the quality of the services have been less than desirable – not on schedule, old carriages, congested, disconnected at users inconvenience, etc.

Malaysia is great at building various erections to even a pyramid in Sunway, Petaling Jaya. But, most of these facilities are not maintained well or even not operational.

In the past, good planning was seldom hindered by interferences and “flavours of the day” request that has nothing to do with good facilities and services for the rakyat.

Most of the time, it is business opportunism.

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TheMole

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