Conflict of interest between SRS Consortium and PTMP?

This article is written in response to SRS Consortium’s letter to the editor “Debunking 5 arguments against the Penang Transport Master Plan (PTMP)”. The arguments put forward by SRS Consortium, the project delivery partner (PDP) for the PTMP, continues to turn a blind eye in basic common sense, scientific evidence and statistics.

1. Questionable population projection is ‘borderline ludicrous’

SRS’ PTMP proposal projected a Penang state population of 2.45 million people by 2030 with over 350,000 people on the three reclaimed islands. However, according to data from the Malaysian Department of Statistics:

  • The population of Penang is only projected to be 1.94 million by the year 2040.
  • The annual net migration has averaged only around 9,400 people in the past 20 years.
  • Net migration to Penang was only 1,300 people in 2013.

Therefore, to reach SRS’ projection of 2.45 million people by 2030, Penang would need a massive net-in migration of over 50,000 people every year. In other words, Penang’s net migration would need to grow by over 3,700% from 2013 and be maintained at five times the average of the past two decades.

Such massive and sustained increases in migration generally only occur in response to famine, war or internal displacement of people.

SRS also projects that the population on the three reclaimed islands will grow at around 6,000 to 7,000 people per year. Looking at the annual net migration for the whole Penang state in the past 20 years (9,400 people), this would imply that 75% of all net migration to Penang will go to the three islands. Again, is this realistic?

SRS then attempts to mislead the ordinary reader by arguing that the population density for Penang island plus the three new islands would be 5,000 people per sq km. This is disingenuous.

What we are questioning is whether it is credible to project a density of 21,636 people per sq km (367,379 people/17 sq km) for the three islands, a density that is higher than Hong Kong (17,000 people per sq km, as quoted by SRS).

It is important that Penang government policies be based on evidence and credible data, not the frivolous speculation of the project proponent. What is so interesting in or around the three reclaimed islands to the point that 75% of all migration to Penang would settle at these islands, and to the point that 367,379 people would squeeze themselves in these three islands when there are less dense areas available elsewhere in the state?

2. High costs of PIL 1 highway remain unaddressed and unjustified

Firstly, I accept that the comparison of construction costs of highways and railways is akin to comparing apples and oranges as they have different technical specifications. Be that as it may, it is generally the case that the cost per km for a railway is more expensive relative to a highway because of the need for additional systems such as power, signalling, tracks and rolling stocks.

However, questions must be raised in this case where the cost per km for the PIL 1 is 56% higher relative to more advanced transport infrastructures such as the KL-Singapore High Speed Rail, and around 7.5 times higher relative to the revised price tag of the East Coast Rail Link (ECRL).

SRS was quick to claim that the high cost of PIL 1 relative to these infrastructures is due to the need for larger tunnels, complex cable bridge and viaduct systems and hilly terrains. It skirts the most basic question: are all these complex and expensive engineering solutions really necessary to solve Penang’s transportation woes, especially when there are cheaper alternatives readily available?

3. Expensive PIL 1 highway fails to address other bottlenecks in Penang’s road network

To make matters worse, various transport studies have consistently provided clear evidence that new highways, such as PIL 1 will significantly increase the amount of vehicular traffic within urban centres, which further exacerbates local traffic congestion and parking problems.

In addition to the “independent studies from local universities and NGOs”, whose work I cited in my previous article, I would also like to remind SRS that even the consultants who wrote the detailed environmental impact assessment (DEIA) for PIL 1 also came to a similar conclusion, which forecasted that traffic congestion will return to Penang within just seven years of PIL 1’s operation (see Chapter 8, pages 8-79 in the DEIA).

This is exactly the reason why transport consultant Halcrow advised against the Penang Outer Ring Road, the precursor of PIL 1, which the present chief minister Chow Kon Yeow vehemently objected to when he was an opposition member of Parliament in 2002.

Despite these warnings, SRS has not only continued to push for the PIL 1 highway at all costs, it has repeatedly ignored my critical question: what solutions does SRS proposed PTMP have in place to resolve the localised traffic congestion and parking limitations that will arise after PIL 1 is operational, especially when local urban centres in Penang island are already so land constrained?

4. LRT ridership projection fallacy

Together with the unrealistic and unjustifiable population projection for Penang, SRS is shameless in continuing to defend the highly ludicrous LRT ridership projection of 42 million within its first year of operations (or a daily ridership of 115,000) and provided no additional details on how it arrived at this figure. The metric that SRS presented on the “daily passengers per station” is irrelevant and an obfuscation of the issue.

It is more likely that SRS arrived at the 42 million ridership via this reasoning: SRS has estimated the annual operating cost of the LRT at RM170 million and the average cost per trip at RM4. To break even, annual ridership would have to reach 42 million per year, or a daily ridership of 115,000 (RM170 million/RM4 = 42.5 million).

Somehow, SRS believes that miracles can be achieved where the Penang LRT (with a much smaller population catchment area) is able to achieve a ridership that is approximately two times higher than the KL Sungai Buluh-Kajang (SBK) MRT, at annual ridership of 22.25 million (or a daily ridership of 61,000 at year one).

Another relevant comparison is Rapid Penang’s total ridership which amounted to only 90,000 per day (22% lower than the projected daily LRT ridership at 115,000) after more than 10 years of operation with 305 buses plying 71 routes throughout the whole state. Does the 42 million ridership forecast for the Penang LRT within its first year of operations not seem ridiculous to SRS?

While there is no doubt that most governments usually fund the initial operations of public transport systems with a small deficit, the problem for the Penang LRT is the magnitude of deficit that might not be sustainably covered by the state, given the highly inflated ridership projection.

By scaling the ridership numbers down to more sustainable levels of 10 million per year, it is projected that the state will be staring at an annual deficit of at least RM120 million, which is 24% of the estimated revenue for the Penang state budget in 2019. The use of excessive financial leverage also threatens the state’s financial health and increases the probability of bankruptcy, requiring a bailout.

5. The 40% public transport modal share illusion

No one in Penang (or globally) is campaigning for everyone to use public transport (100% public transport modal share), nor is anyone urging a complete ban of all privately-owned cars from the road. Rather, what is being campaigned is for more emphasis to be placed on reducing Penang’s car dependence by significantly expanding and improving Penang’s public transport network.

There is an urgency for Penang to increase its public transport modal share from the current low of 5% to catch up with more advanced cities with a 60% public transport modal share (such as New York, Singapore, Seoul, London and Tokyo, which have been constantly quoted by SRS).

SRS’ main arguments are that (1) it is possible to attain a 40% public transport modal share by 2030, and (2) roads are still needed to cater to the remaining 60% private modal share.

Firstly, there is no roadmap to show how the 40% public transport modal share will be achieved. Instead, all the pointers are that it will not. For a start, phase one of the PTMP (LRT, PIL 1 plus the three Zenith paired roads and tunnels) will cost RM24 billion, of which RM17 billion is spent for constructing 70km of highways, relative to RM8 billion for one 30km LRT line.

Clearly, where is the priority given to public transport?

Worse still, by making it easier and more convenient for car users to drive to Penang airport in 15 minutes on the PIL 1, isn’t this encouraging people to drive rather than to use the LRT to the airport (when the same trip by LRT could take at least four times longer)? Wouldn’t PIL 1 cannibalise the LRT ridership and undermine its financial viability?

Secondly, the repeated argument that more highways are needed to cater to the remaining 60% has been falsified using the data projections provided in the Halcrow Report. Calculations have shown that the road network in Penang, in its present form, is more than sufficient to cater for the 60% car modal share by the year 2030 and beyond, because the total number of cars travelling on Penang’s road network in 2030 will be lower relative to today (i.e. car modal share reducing by 36.8%, from a high of 96.8%), even after accounting for population growth.

6. Is conflict of interest SRS’ ultimate motive to bulldoze through the PIL 1 and LRT at all costs?

Ignorance on these critical questions, the continued emphasis on the PIL 1 highway and the piecemeal thinking (in their recent rebuttal article) clearly shows that SRS is only interested in bulldozing through the PIL 1 highway and LRT at all costs, without holistically considering the unintended consequences and spillover effects to other areas of the transport network.
It again prompts one to ask these critical questions:

  • Given that SRS stands to gain in fees (6% of the total project cost) as a PDP, is this the reason why they are pushing for the most expensive transport options available on the table?
  • Is there a serious conflict of interest for SRS in functioning as a proposer, planner and PDP in the PTMP?
  • If SRS Consortium is so confident about the proposed PTMP, why are they not open to an independent review of the PTMP by professional transport bodies such as The World Bank, The Institute for Transportation and Development Policy or the International Association of Public Transport?

Given the lack of capacity and technical advisers (as highlighted in the failure to identify drawing errors for the PIL 1 highway), it is not surprising that the Penang government has become dependent on SRS. They apparently see no other option than to go along with these misguided proposals with limited options put forward by their consultants for the PTMP, despite the potentially grave conflicts of interest. It seems that the Penang chief minister has been taken for a ride.

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.