Nation

RM 55 billion East Coast Rail Link

 

I refer to the front page article “East Coast Rail Link” on all the local newspapers on 10 Aug 2017. The cost of the 688 km rail link is Rm 55 billion as reported. East Coast Rail Link from Port Klang to Kota Baru will shorten the travelling time to less than 4 hours. It will unlock huge economic potential, create thousands of jobs, saving users cost in terms of time and energy.

Although all Malaysians are excited by this news, I wish to point out that having calculated the cost per each passenger, the project is not viable and sustainable. It is so ridiculous.

Even if the Government wants the project for some political reasons, the Government should not simply award the Rm 55 billion contract to one contractor from China without open competitive tender. Our Government must bear in mind that our local contractors can construct the whole length of railway track including all the bridges. Our local steel industry can cast all the steel rails. With the exception of manufacturing the train engines, our local contractors can construct everything required for the complete rail ink.

Let us look at some numbers so that readers can understand better.

Loan is Rm 55 billion

Let us assume a cheap interest rate of 3% pa for 20 years. The total cost of interest at 3% over 20 years = Rm 18.2 billion.

The total cost is Rm 55 billion plus Rm 18.2 billion for interest is Rm 73.2 billion.

Let us assume the total Rm 73.2 billion cost is amortised in 20 years.

Rm 73.2 billion divided by (20X365days) = Rm 10 million cost per day.

This cost has not included the cost for operation and maintenance.

Let us assume the number of passengers is the same as the number currently using the Railway from Padang Bersar, Alor Star, Butterworth, Ipoh, KL, Seremban, Gemas and Johor Baru which is 5,641 passengers per day or 2.069 million per year from official record.

The cost is Rm 10 million divided by 5641 passengers = Rm 1,773 per passenger per day use. The cost per passenger per day is so ridiculous.

All Malaysians must ask our PM Najib why is he so stupid to award the ECRL contract to the Contractors from China without open competitive tender. How many billion out of the Rm 55 billion is for under table?    

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