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Saturday, February 26, 2011

MRT- our penchant for big, bigger projects.

The KVMRT ( Klang Valley MRT) project is a behemoth RM36b, 33b, 37b or even 43b project. The numbers keep on changing. Put this idea to the residents of commercially conscious people, they say why don't we built the MRT underground.

Then the cost will balloon. Sometimes I think remarks from corporate denizens are purposely highlighted to form a public opinion that will not be shocked by the astronomical costs. Gamuda-MMC will once again perhaps employ the German engineering firm, Wayss & Freytag of Germany using the Tuah and Gemiling TBM- Tunnel Boring Machines. Gamuda-MMC is the 21stcentury apek contractor now known as PDP- Project Delivery Partner.

The people in charge of this project are presently acting as a much pressured midwife, running helter skelter trying to do a job which should be done by the PDP. The notices on tress remind us of the notes from Tukar Tiub, Volcano Massage and Adult Toys notices.

Why not ask the PDP to conduct the research and come up with the paper? After all this EPP was touted as a private sector driven project which is the driving force behind our great Economic Transformation Plan.

The 'great' component of this project now seems to be the cost- indefinable as yet. It could be anything.

When people start questioning about more details about this project, don't skirt around by saying people are politicizing the project. Politicians do what they do best- ask irritating questions so that answers are forthcoming forthrightly. If we cannot come out with reasonable answers, the public has a right to insinuate some hidden agenda.

Somehow, this project does not fit into the agenda components that can win Najib elections. Where is the rural development agenda? I mean, this MRT benefits only people in the Kelang Valley who are not likely going to vote BN in the next general elections. You are going to spend money in an area where you are NOT getting the votes while ignoring much needed development in rural areas.

The spillover effects are going to benefit precisely those who are rooting for this project. The land owners and people who have the money to park shopping premises at strategic locations on the MRT lines. According to an assessment, properties near MRT's will tend to have a 20% to 30% premium. The biggest beneficiaries of the MRT project are developers or owners of large land banks near MRT interchanges in Kuala Lumpur city with high density development potential.

In a telling passage the same assessor noted that these people have strong and well-connected shareholders with strong balance sheets and a track record in high density development to bid for MRT stations to be integrated with or located near their projects.

So who will benefit most or more than other people? They will include people like YTL Land & Development Bhd, Selangor Properties Bhd, Guocoland (M) Bhd, Bolton Bhd and SP Setia Bhd which have the highest Revalued Net Asset Value exposure to potential interchanges. Ah yes, the ubiquitous SP Setia who gets 51% while PNB gets 49% percent in a recent venture.

Already property prices would start moving ahead as developers price in improved accessibility and higher traffic from the MRT.

So when property prices rise can Malaysians afford them? Malays can afford them? Malays are pushed outwards as they become displaced by rising property prices. If Malays don't get housing, will they vote BN?


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