DAP wants MMC-Gamuda MRT terms revealed

Pua wants to know the proposed fare structure for the MRT. — File pic

KUALA LUMPUR, Jan 3 — The DAP today urged the government to disclose the fees being paid to MMC-Gamuda for the RM36 billion Greater Kuala Lumpur mass rapid transit (MRT) project.

Party national publicity chief Tony Pua said it was "interesting" that MMC-Gamuda had to bear all overrun costs despite being only the project delivery partner (PDP) on "possibly the riskiest ever" infrastructure project in Malaysian history.

"We call upon SPAD (Land Public Transport Commission) to disclose in full the terms of the arrangement with the PDP, including the fees being paid to MMC-Gamuda as the PDP," Pua said in a press statement.

He said Malaysians could not be blamed for doubting the credibility of the government as it had failed in the past to take action against contractors who did not deliver on time or on budget.

"For example, the government bore the cost to complete the Matrade building where the cost of construction increased from RM167 million to RM287 million after nearly 10 years of delay in 2006," he said.

"At the same time, the government had to bear RM70 million of repair costs to the RM238 million Middle-Ring Road 2 while the contractors got away scot-free."

Pua also accused SPAD of "putting the cart before the horse" by going ahead with the 10-year MRT project before the completion of the Urban Public Transport Plan.

The plan is expected to be ready by September this year.

The Petaling Jaya MP claimed that a detailed study on routes, population density and growth, and public transport mix had not been done, and challenged SPAD to prove him wrong by publishing a full transport requirement study.

He also asked what the proposed fare structure for the MRT would be, given that it will take 20 years for the less costly light rail transit (LRT) to pay back for itself — and then only if fares are increased significantly from current rates.

"Last year’s audit report on Prasarana showed that the current average LRT fare of RM1.60 has to be increased to nearly RM9 for the LRT infrastructural costs to be fully recouped within the next 20 years despite the LRTs costing the federal government less than RM8 billion, nearly 6 times less than the proposed MRT system," Pua said.

"Are we going to take two centuries to pay for the RM47 billion MRT project?"

Pua pointed out that Prasarana was now heavily indebted with RM8.5 billion in bonds whose interest the company could not service, saying that Prasarana had been heavily criticised in the 2009 Auditor-General's Report for making RM840 million in losses.

"We call upon SPAD to be completely transparent with the entire plan, design and financial impact of the MRT project to convince the rakyat that the MRT routes are optimised based on maximum public benefit, but also that it will not become an unsustainable project which will leave our future taxpayers with billions in debt," he added.

Prime Minister Datuk Seri Najib Razak said last month that the implementation of the MRT is expected to generate a gross national income (GNI) of between RM3 billion and RM4 billion beginning next year until 2020.

He also expects RM8 billion and RM12 billion to be generated in terms of spin-offs from the construction of the MRT project.

The MRT is an economic entry point project identified for the Greater Kuala Lumpur/Klang Valley National Key Economic Area (NKEA) under the Economic Transformation Programme (ETP).