MRT Line 2 moved to bail out 1MDB, says DAP

The mass rail transit (MRT) will not serve the densely populated residential areas of Cheras and Pandan after Putrajaya realigned Line 2 to benefit 1MDB, says an opposition lawmaker. – The Malaysian Insider file pic, March 30, 2015.

The realignment of the Sungai Buloh-Serdang-Putrajaya mass rail transit (MRT) line is to benefit debt-laden strategic investment fund 1Malaysia Development Bhd (1MDB) as the government will have to acquire land from it to build the line, a DAP lawmaker said today.

The party's national publicity secretary Tony Pua said the line, also called the MRT Line 2, would now bypass the densely populated residential areas of Cheras and Pandan, and instead pass through Bandar Malaysia, a property development project by 1MDB for which not "a single construction stone" has been laid.

"(This) will clearly help 1MDB raise the value of its land bank significantly. 

"Previously touted at a gross development value of RM20 billion, the figure has been inflated nearly eight-fold to RM150 billion after the 'strategic review' conducted in January this year," Pua said in a statement today.

The Petaling Jaya Utara MP was commenting on a Singapore Sunday Times report on the realignment of the MRT line.

The paper reported yesterday that Malaysia’s second MRT line (MRT2) “will be rerouted from a densely populated suburb in the Klang Valley to a new township that is yet to be built on land belonging to 1Malaysia Development Bhd (1MDB)”.

The report said that such a move was expected to “not only delay the completion of the RM25 billion Line 2 but also incur extra cost for the government”.

"The federal government will need to new acquire land from 1MDB for the purposes of obtaining access for the MRT2 line. 

"If this were to happen, it would be an absolute travesty because 1MDB secured the Bandar Malaysia land, the current Sungai Besi airbase for a paltry RM75 per square feet.

"The above clearly demonstrates that the Barisan Nasional government will stop at nothing to bail out the financially stricken and scandal-ridden 1MDB," he said of the Finance ministry-owned strategic investment fund that has debts amounting to RM42 billion in under six years of operation.

He said 1MDB was now desperate for cash to repay not only its principal but also its annual financing cost in excess of RM2 billion.

Pua said the 200,000 middle- and lower-middle-income earners living Cheras and Pandan would now be denied mass transport facilities and as such, Putrajaya should impose a substantial development charge on 1MDB.

"The charge will go towards defraying the increase in cost of MRT2 as a result of the realignment, the cost of building the MRT station in Bandar Malaysia as well as to provide alternative public transport solutions for the affected residents."

Under the original alignment, MRT Line 2 would be 59.5km long and run from Kepong to Jalan Sultan Azlan Shah (Jalan Ipoh), Kampung Baru, KLCC East, Pandan Jaya, Pandan Mewah, Plaza Phoenix then on to Mines, Serdang and down to Putrajaya Sentral.

Pua said the government had already awarded 1MDB a series of multi-billion ringgit power plant projects via direct negotiations in 2014, sold land to the company at heavily discounted prices, provided a “letter of support” to guarantee US$10 billion loans in 2013 and more recently offered a RM950 million cash advance in February to the company.

Despite all these moves and claims that 1MDB's upcoming initial public offering of its power assets would solve its cash-flow problems, Pua said, it appeared Putrajaya was "working overtime" to bail out 1MDB, both "directly and indirectly".

- TMI