THE news headline reads, “Public feedback sought for MRT3 project”. MRT Corp will be undertaking a three-month public inspection exercise to gather feedback from members of the public on the project, currently still in the planning stages.
In January, Anthony Loke iterated the government’s commitment to proceeding with the project and emphasised that it is already planned and will be executed. Land acquisition is in progress but the decision to award is under the purview of the Finance Ministry.
It baffles me when eight months ago, Loke said that it is already planned and will be executed and now MRT Corp says it is still in the planning stages and gathering feedback.
Back in August 2022, there was a media release stating “MRT3 tender process progressing well and project management consultant appointed”. In September 2022, at least eight companies submitted bids for the three civil main contractor (CMC) packages (CMC301 estimated @ RM2.79 billion, CMC302 estimated @ RM13.94 billion and CMC303 estimated @ RM14.29 billion) with price breakdown between construction services and contractor financing. There have been a few extensions since.
In April 2023, analysts said the government will likely complete the cost review by June and award construction contracts soon after. In December, the government approved the allocation for the land acquisition process, without specifying the exact amount.
Before I give some feedback, allow me to remind readers of the Auditor-General’s Report 2/2024 in July 2024.
It was reported that the MRT1 final account has not been closed although it is fully operational since 2017. For MRT2, 84 of the 220-construction works have not been completed and 22,114 damage-related cases were recorded. Four of nine corporate governance elements were not fully practised and recommended corporate governance be improved.
Now, my feedback.
1. Since tender has been called more than two years ago, would there be constructive and productive public engagements? Would the feedback received be incorporated? Hope this is not another public relations exercise.
2. Please upload the detailed information in MRT Corp’s website including the EIA, Strategic Impact Assessment (SIA) and value management study (VMS).
3. Avoid conflict of interest – The Environment Department published a 3rd Edition Guidelines for Environmental Noise Limits and Control and it received contributions from the same person who did the EIA study for MRT projects.
4. Were there any assessments on the productive efficiency of the MRT3 versus other means of public transport and allocative efficiency (public transport versus other competing demands for public resources)?
5. Ensure reliability of data used by consultants/advisers – were they subjected to a rigorous analysis? Especially on ridership targets, environmental and social impact studies, budgeted reimbursables, amount for contingencies and confirm whether there was any peer review.
6. Who evaluated the longer-term operation and maintenance costs as it would have a negative effect on the economics of the project leading to subsidies especially since SPAD will be the operator?
7. What is the total estimated cost including all “soft costs” since cost review done more than a year ago?
8. Will the new detailed alignment constitute a variation order (VO) to the tender submitted?
9. Will the new alignment affect the KL Structure Plan 2040?
10. How would Transit-Oriented Development (TOD) along the alignment work to centre employment, social services, cultural and living opportunities for people living in those areas? Study showed Klang Valley citizens were priced out of these residential developments.
11. Why public display conducted more than two years after tender called?
12. Would the project be tabled in parliament for due diligence?
13. Strict adherence and enforcement needed on requirements of EIA, SIA, VMS and other conditions.
14. To review compulsory land acquisition as history showed lucrative gains to some landowners who then declared special dividends to its shareholders.
Separately, how would MRT Corp deal with the underperformance of MRT1 and MRT2 in achieving ridership targets? Not all Klang Valley residents derive significant benefits.
For a balanced development, how about delivering rapid transit systems in other congested urban areas at a fraction of the cost of MRT3?
Are we neglecting crucial regional developments in other parts of the country? This is an inefficient planning strategy. Obviously, the development costs will be much cheaper and ease problems faced in the Klang Valley. Foreign investors are attracted to these regional areas but the lack of infrastructure facilities prevented them.
The construction and building materials sector will still benefit.
We must adopt a more inclusive approach for economic growth and contribute to social and political advancement. It may also control inflation.
Another thing that baffles me is when MRT Corp believe it is possible that MRT3 will be included in Budget 2025 but Loke said it is off-balance sheet. Loke also said the government is not shelving the project even though it is funding the Penang LRT since the Anwar is committed to both and don’t think the government will come under fiscal constraints.
Strangely, in parliament, the deputy finance minister said there are plans to ensure MRT Corp can reduce its dependency on the government. MRT Corp accumulated losses as at 2022 was RM57.5 billion and the figure for 2023 is still not available.
The government spent RM100 billion on MRT1, MRT2 and LRT3. Unfortunately, the first two projects have not been particularly successful.
DanaInfra who manage the funding for the KVMRT, upsized MRT1 and MRT2 project financing programme to RM82.2 billion in August 2023 with irrevocable and unconditional guarantee by the government.
When everything is completed – including MRT3, RTS Link, and MLL – the amount spent will be about RM140 billion excluding cost overruns or close to 10% of the RM1.5 trillion national debt figures!
Saying MRT3 is an opportunity to rejuvenate the economy and upskill the talent and capabilities is very subjective. Spending about RM50 billion just to improve the connectivity of the MRT network a very expensive exercise.
We should start building a culture of performance and accountability and decisions should be on need basis.
What say you… – September 8, 2024.
* Saleh Mohammed reads The Malaysian Insight.
* This is the opinion of the writer or publication and does not necessarily represent the views of The Malaysian Insight. Article may be edited for brevity and clarity.
