Thursday, March 30, 2017

Selangor Government should flex its muscles to avoid ECRL becoming white elephant

Media Statement by Yeo Bee Yin, ADUN for Damansara Utama on Thursday 30 March 2017 in Shah Alam.

Selangor Government should flex its muscles to avoid East Coast Rail Link (ECRL) from becoming an expensive white elephant.

The East Coast Rail Link (ECRL) project will have approximately 600km of electrified double-tracking lines and will link Port Klang to Kuantan then all the way passing through East Coast cities to Wakaf Baru. Approximately 80km of the 600km ECRL is in Selangor.

The new network will not only connect the populations of the east coast to Selangor and Kuala Lumpur, it will also connect ports on the east and west coasts of Peninsular Malaysia, i.e Kuantan Port and Port Klang. Nevertheless, the cost of ECRL project will affect the price of the passengers’ train tickets as well as the cargo’s freight fees - the higher the project cost, the more expensive the train tickets and freight fees; or the government needs to subsidize it to keep the price competitive through tax payers monies. Either way the people will eventually need to pay for it.

The current ECRL project is awarded to China Communication Construction Co Ltd (CCCC) without open tender at a price of RM 55 billion with financing via soft loans from the Export-Import (Exim) Bank of China. This price tag of RM 55 billion for 600 km rail or RM91.7 million was described by The Edge Malaysia as the world most expensive rail of its class. My colleagues in Pakatan Harapan have repeatedly raised concerns over this high price tag.

Additionally, HSS Integrated Sdn Bhd, which completed the feasibility study of ECRL project in December 2015, disclosed in its Corporate Profile and Capability statementthat the proposed 545km ECRL route that it studied will cost RM 29 billion or approximately RM53.2 million per kilometer. Why the sudden increase to RM55 billion for an additional 10% of the rail length? When asked to disclose ECRL feasibility study prepared by HSS, which also includes the economic study, Pakatan Harapan members of parliament were met with cold shoulders from the federal government.

Approximately 80km of the 600km ECRL mainline is in Selangor. Once the alignment is finalized, probably around 1000 pieces of land need to be acquired in Selangor to build ECRL. This project will give a lot of economical and social impact to the people of Selangor hence the Selangor government must do whatever it can to ensure that it doesn’t become a tool for politicians to milk out future generation monies in the name of infrastructure.

Allowing hugely overpriced ECRL project to go on will jeopardize the next generation as they are the ones that need to pay for the high price tag of ECRL. When the prices of passenger train ticket and cargo transportation are not competitive as a result of bloated project cost, ECRL will likely become underutilized and become an expensive white elephant.

Therefore, Selangor state government should flex its muscles in land acquisition and local authorities to avoid ECRL becoming an expensive white elephant.

The Selangor state government should use similar principles it used for KIDEX to ECRL. When considering KIDEX, Menteri Besar Azmin Ali gave KIDEX developer three requests, failing which the state government would reject the project. These request included: i. to prepare and disclose traffic impact assessmet, social impact assessment and environmental impact assessment ii. to disclose the tol rate for the entire concession agreement and iii. to disclose conccession agreement.

Similarly, the Selangor state government should not give any cooperation on land acquisition and local authorities approval on ECRL until everything about the project is above board. The federal government must disclose:
i. all the relevant studies on ECRL, including the feasibility studies done by HSS;
ii. the framework financing agreement and engineering, procurement, construction and commissioning contract signed in Beijing on 1 Nov 2017; and
iii. the estimated riderships and the future price for passengers’ train tickets and cargo transportations to make the project at this price tag economically viable.

Finally, Selangor state government should do whatever it can to pressure federal government to conduct an open tender for the ECRL project.

Malaysians and Selangorian can’t afford another expensive white elephant.