Saturday, October 14, 2017

ECRL to cost more than RM70 billion?

Media Statement by Yeo Bee Yin, State Assemblywoman for Damansara Utama on Friday 13 October 2017 in Petaling Jaya.

Putrajaya must answer if East Coast Rail Line (ECRL) will cost Malaysians up to RM 70 billion.

We read with concern the report on The Edge Malaysia regarding the potential ballooning of ECRL cost to up to RM 70 billion [1].

When the plan to build ECRL was first announced, the East Coast Economic Region Development Council (ECERDC) CEO, Datuk Jebasingam Issac John was quoted in the newspaper in April 2014 that the ECRL project would cost around RM30 billion. In December 2015, HSS Integrated Sdn Bhd, which completed the feasibility study of the ECRL project, disclosed in its Corporate Profile and Capability statement that it studied the originally proposed ECRL route of 545km long and the project would cost RM 29 billion.

Last year, with some additional length to the route, the government announced the cost at RM 55 billion, which was already approximately 80% increase based on the feasibility study by HSS. Now we are looking at the potential further balloning of cost up to RM 70 billion!

We would like to seek clarification from Putrajaya as to how much exactly will ECRL cost the Malaysian people?

While we welcome rail infrastructure project in the east coast, we are perplexed at the high price tag. ECRL is set to be the most expensive mega infrastructure project our country has ever built. Nevertheless, the most expensive mega project in Malaysia was awarded to a China’s firm - China Communication Construction Co Ltd (CCCC) at an exorbitant price without an open tender. We have in our previous statements compared ECRL cost to other rail projects around the world and showed how the price tag of RM55 billion was unreasonable. One of The Edge articles rightfully described the ECRL as the world’s costliest railway of its class.

The cost of the 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 will be. When the prices of passenger train tickets and cargo transportation are not competitive as a result of bloated project cost, the ECRL will likely become under-utilised and become an expensive white elephant. Otherwise the government needs to subsidise it to keep the price competitive through tax payers’ monies. Either way the rakyat will eventually need to pay for it.

Therefore, we strongly believe that the Malaysian people deserve to know more details on the cost structure of the project. In the light of the risk of further ballooning of construction cost, we urge Putrajaya to disclose the detailed breakdown of cost of the project.

Perhaps the MCA president and transport minister Liow Tiong Lai, who has been singing praise about the project, can hold a dialogue with concerned Malaysians to explain in detail as to how come ECRL cost so much?