KVMRT What is the real cost - Saleh Mohammed

The Malay Mail Online, 22 December 2016

DECEMBER 22 ― Congratulations to MRT Corp on achieving on-time completion for Phase 1 of Line 1 (Sungai Buloh-Kajang ― SBK Line). However, the concern is how much does it cost and also the estimated costs for the other two lines.

A few days ago, the prime minister said the project could be implemented at a cost of about RM21 billion compared to the targeted cost of RM23 billion in the initial stage. He lauded MRT Corp for completing Phase 1 of the MRT project within its target delivery date and also saving the government RM2 billion in the process.

Flashback to 2014, the New Straits Times (NST) on July 2, 2014, reported RM23 billion for systems and construction costs, while RM7 billion for consultant fees and reimbursables. The former CEO said seven more contracts worth slightly below RM1 billion will be given out this year, bringing the total value of jobs awarded to RM23 billion.

So much for Line 1. How about the other two lines or the total cost for the three lines? At the earliest stage, it was reported the total cost of the three lines would be RM36 billion. The cost was quoted in 2009 could have ballooned up to a total of RM50 billion by now, considering the increase in construction raw material prices, the Land Public Transport Commission (SPAD) CEO told the media in July 2011.

In an interview with Business FM (BFM 89.9) radio station on July 23, 2012, the former CEO said, “on a linear basis the cost could be RM100 billion... per kilometre will run to that number”. If one checks the KVMRT Research website, it says MRT Corp is the implementation agency and asset owner of the KVMRT, which comprises three lines estimated to cost around RM80 billion.

On August 3, 2016, the NST reported, (MRT Corp) said the total cost for Line 2 (Sungai Buloh- Serdang-Putrajaya ― SSP Line) could be anywhere between RM35 billion and RM40 billion. “We have not finalised the actual cost for the SSP Line but for construction alone, we have budgeted RM32 billion”, MRT Corp CEO said.

As for the total costs for Line 3, I think only the Almighty knows.

If we go back to Line 1 as discussed above, the cost quoted is only for construction. It is very clear that fees for the Project Delivery Partner (PDP) was not included.

Technically, the financing cost should be included in the cost of a project.

Glancing at the DanaInfra Nasional Berhad website, the ICP/IMTN Programme was upsized to RM21.0 billion in 2014 and subsequently further upsized to RM46.0 billion in 2015 to cater the funding requirements of Lines 1 and 2. DanaInfra’s primary role is to secure and manage the funding for the KVMRT.

If we include the financing costs to Lines 1 and 2 and PDP fees to Line 1, the total cost for the two lines would easily be more than RM70 billion.

Again, only the Almighty knows the total cost for Line 3, if approved.

So, how much do you think the overall cost will sum up to?

* This is the personal opinion of the writer or publication and does not necessarily represent the views of Malay Mail Online.

(Web source: http://www.themalaymailonline.com/what-you-think/article/kvmrt-what-is-the-real-cost-what-say-you...-saleh-mohammed)