MRT 2: Cutting costs or cutting corners?

Bernama pic.

The finance ministry recently completed its review on the Sungai Buloh-Serdang-Putrajaya (SSP) MRT 2 line and announced different measures to reduce the overall price tag of the project.

Part of the measures taken by the government was to renegotiate with the SSP MRT 2’s project delivery partner MMC-Gamuda, where it successfully reduced the construction cost of the above-ground portion by RM5.22 billion.

MMC-Gamuda’s contract for the underground portion, however, was cancelled and subjected to a fresh international open tender process after both parties failed to reach an agreement.

To achieve these necessary cost savings for the underground portion, it was understood that the project scope of the SSP MRT 2 was revised, where the number of underground stations in Kuala Lumpur’s city centre was scaled down from 10 to six, and the number of entrances to stations reduced.

While these cost savings are certainly a welcoming piece of news, these measures are likely to incur unintended consequences where the overall benefits of the SSP MRT 2 line are reduced.

For example, the scaling down of stations will certainly reduce the MRT’s coverage area, while a cutback in the number of entrances to stations will reduce station accessibility and make it less convenient for certain commuters to access these stations due to a longer detour.

Both of these factors appear more like cutting corners than cutting costs, which will lead to the construction of a sub-optimal infrastructure, a reduction in the daily ridership of the SSP MRT 2, and difficulties in the future expansion of the MRT 2 system.

Most importantly, the finance ministry only provided figures on the expected cost savings of the SSP MRT 2 project without revealing details on the exact compensation costs that will have to be paid to MMC-Gamuda.

Are these cost savings able to justify or cover the additional re-tender and compensation costs that will have to be incurred as a result of cancelling the underground work package for the MRT 2? Will the re-tender process significantly delay the completion date of the SSP MRT 2? What exactly are the trade-offs and steps taken for the above-ground portion in order to achieve cost savings of RM5.22 billion? These are pressing questions that must be answered by the finance ministry to provide Malaysians with an unbiased and clearer picture of the different trade-offs being made.

Finally, given that most major transport projects such as the KL-Singapore High-Speed Rail, East Coast Rail Link, MRT 3 Circle Line and SSP MRT 2 are being reviewed by the Pakatan Harapan (PH) government due to high costs, why is the RM46 billion Penang Transport Master Plan (PTMP) spared from the same fate?

If the PH government is truly committed to obtaining “value for money” on all government expenditure, then it should be consistent and walk the talk by initiating an independent review on the highly controversial PTMP, where significant cost savings in the order of 40% can easily be achieved.

Roger Teoh is a PhD postgraduate studying at the Centre for Transport Studies, Imperial College London.

The views expressed are those of the author and do not necessarily reflect those of FMT.