Ong calls for new agreement with ERL

ongKUALA LUMPUR: Serdang MP Ong Kian Ming has urged the Federal Government to negotiate a new concession agreement with Express Rail Link Sdn Bhd (ERL) which runs the high speed rail line from KL Sentral to KLIA and klia2.

The new and existing agreements must be made public, he added. The public can then make comparisons and ensure the government and passengers get a fair deal.

The MP cited three reasons for a new agreement.

Firstly, the government fully funded the RM100 million extension of the ERL link from KLIA to KLIA2, and handed the facility to the company free at public expense.

Secondly, the extension saw a 43 per cent increase in ERL’s passengers from 6.44 million in 2013 to 9.23 million in 2014.

Thirdly, under the existing agreement, the price of a one-way ticket from KL Sentral to KLIA would increase to RM97 in 2019 and RM126 in 2024. It was RM31 in 1999.

The MP was commenting on the Auditor- General (A-G) concluding the concession agreement with ERL Sdn Bhd was “lopsided”. “The A-G said the agreement was not ‘best value for money’.”

The A-G’s Report also states the government has agreed, in principle, to extend the ERL concession to 2059 i.e. by 30 years from the current 2029, he noted. “The extension was supposed to be signed this month.”

Briefly, said the MP, the ticket pricing problems and compensation for ERL stem from the concession agreement being kept under wraps.

As a result, he lamented, the concession holder can negotiate steep ticket price increases. “They know the government won’t be under any public pressure as this information won’t be disclosed.”

The concession holder can use the shortfall between actual and projected revenue to get compensation from the government, he warned. “ERL Sdn Bhd already has an outstanding claim of RM2.9 billion.”

ERL’s projected revenue in 2014, for example, was RM905 million. It’s actual revenue was only RM124.3 million or 13.7 per cent of the projected total.

Ong called for ticket price increases, under the new agreement, to be reasonable and justified. “The methodology for projecting passenger and revenue growth must be accurate.”

“Profits must be capped at an agreed rate.”

He sees no reason why the passenger service charge cannot be scrapped as not all outbound passengers use the ERL. These charges, imposed since 2002, cost passengers RM583.66 million as at June last year.