RTS extension to end-April 2020 needed to amend project

This article first appeared in The Edge Financial Daily, on November 6, 2019.
RTS extension to end-April 2020 needed to amend project
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KUALA LUMPUR: Malaysia can only sign the Rapid Transit System (RTS) Link project agreements with Singapore by end-April 2020 as it needs a time extension to amend the project’s “scope and structure”, said Transport Minister Anthony Loke in a Bernama report.

While affirming the government’s decision to continue with the project, he said it will be amending the agreements and implementation of the project within the six-month extension.

“It’s true, we have requested for a six-month extension before we can sign all the agreements. [This is] because the government decided to continue [with the] RTS [project] with some amendments to the project’s scope and structure.

“When there are amendments, we need to conduct studies on them. We will appoint a consultant to undertake engineering studies as well as amendments to the agreements that we have to sign,” he told reporters in Parliament yesterday.

The agreements to be signed by Malaysia and Singapore are the restated RTS Link Bilateral Agreement following amendments to the project, an agreement between Prasarana Malaysia Bhd and Singapore’s SMRT Corp Ltd to form a joint-venture operating company, and a concession agreement between the governments of both countries to appoint the operating company as the RTS Link operator.

This is the third time Malaysia has sought an extension for the RTS project; Malaysia and Singapore inked a Supplemental Agreement on May 21 to extend the deadline to Sept 30, followed by another extension to Oct 30.

The minister also elaborated that a 36% cost reduction of the RTS project only applies to Malaysia’s portion of the project in Johor.

The Edge Financial Daily reported last Friday that the public transportation link now costs RM3.16 billion instead of the original RM4.93 billion after proposed revisions to its cost structure.

They include changing the infrastructure system from a mass rapid transit to a light rail transit, and using both countries’ borders as key parameters for project financing.

“The project involves two governments; whatever on our side will be borne by Malaysia, [and] after the border, it is up to Singapore,” Loke said.

Johor’s Sultan Ibrahim Sultan Iskandar, owning the Bukit Chagar tract on which the RTS station will be built, has waived the land cost estimated at about RM800 million to RM900 million.

According to a Straits Times report, Singapore’s Transport Minister Khaw Boon Wah said the island republic, in the spirit of bilateral cooperation, had agreed to extend the deadline a further six months from Oct 30 to ink the agreements.

Both countries will discuss Malaysia’s proposed changes to the project, said Khaw — also coordinating minister for infrastructure — in a written reply on Monday.

However, Malaysia had yet to share its proposed alterations to the plans, he said.

“Without the details, Malaysia’s proposal is incomplete and Singapore is unable to make a thorough assessment of the technical and commercial feasibility of the proposal.

“While we are not obliged to accept Malaysia’s proposed changes, we will continue to keep an open mind and assess them carefully and objectively,” he added.