MRT price tag in the dark

Nobody knows how much the MRT will cost, or how much its lead contractor, Gamuda-MMC, will be paid.

PETALING JAYA: The true cost of the My Rapid Transit (MRT) is still unknown, even to the government.

Deputy Minister in the Prime Minister’s Department Ahmad Maslan said that previous MRT cost estimations were only speculation.

“The total cost (of the project) that has been reported in the papers prior to this is speculation and not the true cost of the MRT.”

“The project cost has not been finalised because negotiations between the project’s owners – MRT Corp – and the Project Delivery Partner (PDP) are still ongoing to make sure that the project costs will be reasonable,” he told the Dewan Rakyat in his budget winding-up speech on Monday.

Ahmad, however, did not give a rough estimation as to the project’s costs, thus leaving many to speculate further on the perceived multi-billion-ringgit MRT’s price tag.

Prior to the project’s launch in July, the MRT was estimated to cost RM36.6 billion, a number proposed by the MRT’s PDP, or lead contractor Gamuda-MMC.

Various news reports would later peg the price at RM53 billion. Politicians and some experts have claimed that the project may see cost overruns, driving this number higher.

Some have also asked if the MRT would have to be bailed out by the government in the future.

Billions of ringgit have been spent to bail out ailing public transport systems such as the STAR-LRT, Putra-LRT, KL Monorail and some bus operators.

Meanwhile, Gamuda-MMC is still negotiating its contract fee over the MRT project with the government.

In his speech, Ahmad said: “The percentage fee for the PDP’s contract payment has not been finalised. Negotiations are still ongoing between MRT Corp, the owner of the project – wholly-owned by the Ministry of Finance – and the PDP to find a reasonable percentage fee.”

He added that the MRT’s independent check engineer (ICE) percentage fee was also less than 2% of the project’s total costs.

FMT previously reported that the project’s ICE role had been given to HSS Integrated (HSSI) Sdn Bhd, an engineering consortium closely linked with Gamuda-MMC.

HSSI had purportedly worked with Gamuda-MMC over the RM9-billion electrified double-tracking Padang Besar-Ipoh project.

In May, PJ Utara MP (DAP) Tony Pua raised concerns that HSSI was being paid above the usual ICE market rate; 0.8% of the project’s total costs.

Ahmad did not say if Gamuda-MMC’s charges would be higher or lower than HSSI’s.