Liow explains big jump in ECRL cost

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This article first appeared in The Edge Financial Daily, on November 16, 2016.


KUALA LUMPUR: Transport Minister Datuk Seri Liow Tiong Lai has cited a change in alignment, a longer tunnel link and a weak ringgit as the reasons for the cost of the East Coast Rail Link (ECRL) project jumping to RM55 billion, from RM29 billion as estimated by a consulting engineering firm previously.

“We have nothing to hide,” he said in Dewan Rakyat yesterday. “We are a responsible, accountable and transparent government.”

“The consulting firm previously used a different alignment,” he said in response to the opposition’s claim that the project consultant had previously estimated the value of the rail project at RM29 billion.

“Previously, the length [of the rail link] was 545km; now it is 600km and this does not include the part from Gombak to Port Klang. And at that time, the US dollar was at RM3.20, [but] was at RM4.20 to RM4.50 recently,” he said.

Liow added that the project will now feature a 50km tunnel link, compared with a 30km one in the original plan, and there will be more viaducts too.

He claimed that the rail project is viable as it will not only be used to ferry passengers, but also to transport cargo, as it will link Kuantan Port to Port Klang.

Liow said some quarters, including opposition parliamentarian Tony Pua, had been using the issue to “gain political mileage”.

“Please be patient,” he said, adding that the Economic Planning Unit (EPU) of the Prime Minister’s Department will explain the details when the alignment and cost are finalised.

Earlier yesterday, Pua said a feasibility study conducted for the government by Bursa Malaysia-listed engineering consulting firm HSS Engineers Bhd had concluded that the ECRL should cost RM30 billion at the most.

“HSS stated the project value was RM29 billion or RM53.2 million per km. The study hence supports East Coast Economic Region Development [Council] CEO (chief executive officer) Datuk Jebasingam Issace John, who had previously stated that the ECRL will cost about RM30 billion.

“Within a year, the cost doubled?” he asked at a press conference at the Parliament lobby.

According to Pua, HSS Integrated Sdn Bhd, a subsidiary of HSS, was appointed to undertake the study in December 2009 and completed its work in December last year. The company was paid RM8.7 million for the services.

HSS has been involved in some of the largest engineering projects in Malaysia. The firm’s rail experience includes the electrified double-tracking from Ipoh to Padang Besar, MRT Line 1, the Ampang Line LRT extension project and the KLIA Ekspres rail link.

Quoting HSS’ corporate profile and capability statement, Pua said the proposed route was about 545km in length, starting from Kuala Lumpur to Tumpat and passing through Mentakab, Kuantan, Kuala Terengganu and Kota Baru.

The DAP publicity secretary called on Datuk Abdul Rahman Dahlan, the minister in the Prime Minister’s Department in charge of the EPU, to make public the feasibility study conducted by HSS.

“He has to justify to Malaysians why the prime minister awarded the contract to China Communications Construction Co Ltd at RM91.7 million per km, which is 72.4% more expensive than the [cost in the] HSS study of RM53.2 million [per km].

“Failure to do so will only confirm Malaysians’ worst fears that the RM55 billion overpriced project is an attempt to siphon [off] up to RM25 billion to pay off 1MDB’s (1Malaysia Development Bhd) debts,” said Pua.