TODAY, the first phase of Malaysia’s largest infrastructure project, the MRT Line 1 Sg Buloh-Kajang line becomes fully operational.

But debate continues to rage among lawmakers and the Najib administration about its true cost and whether – with its hefty price tag – it will benefit the public in the end.

As pointed out by Pandan MP Rafizi Ramli, the fact that a dispute has erupted in the first place over the actual cost of the project shows that there is little transparency over something with huge ramifications for the public. 

If the Najib administration’s figures on the true cost of the MRT are questionable, what certainty is there that other mammoth projects, such as the KL-Singapore High Speed Rail and the East Coast Railway, will be priced accurately?

When Prime Minister Najib Razak announced the project in his Budget 2011 speech, he quoted a RM40 billion price tag.

It was understood that this was for all three lines – MRT SBK, Serdang-Putrajaya (MRT SSP) and the Circle Line – all of which are slated to be ready by 2020 at a total length of 141 km.

Chapter five of the 2011 Economic Transformation Plan handbook states that a preliminary cost of the whole project would be RM47 billion.

Of that total, RM36 billion would be for infrastructure and RM2 billion for expedited land acquisition. An additional RM9 billion would be needed for operating assets, such as rolling stock.

In October 2015, questions began to be raised over these early RM40-47 billion estimates, when DanaInfra Nasional Bhd (DanaInfra) said the MRT Line 2 alone was estimated at RM42 billion.

DanaInfra is the government’s special funding vehicle for infrastructure projects tasked with raising funds for them. It announced that it was raising RM50 billion through a debt programme to pay for MRT Line 1 and MRT Line 2.

But in December 2016, when Najib launched the MRT Line 1 (SBK), Rafizi said the true cost of the whole scheme would be twice the amount first quoted.

Najib said the 51km MRT Line 1 cost RM21 billion and the government had saved RM2 billion from the original price tag of RM23 billion.

Rafizi said based on calculations from publicly available documents, all three lines could cost a total of RM124 billion. This is a far cry from the RM40 billion first announced by Najib or the RM47 billion stated by the ETP.

On December 24, 2016, the owner of the MRT project, Mass Rapid Transit Corp Sdn Bhd (MRT Corp) released a statement saying that the earlier RM40 billion was “no longer relevant”.

“We wish to make clear that this figure was derived from a conceptualised proposal back in 2010. The amount did not include electric trains and related systems, as well as land acquisition,” MRT Corp said.

The RM40 billion price tag was originally submitted in a 2010 private sector proposal to the government for an MRT project to be built concurrently, based on 2009 prices, the company said.

It said in 2012 the MRT Line 1 would cost RM23 billion and that the second line was estimated at RM32 billion. 

Feasibility studies for the MRT Line 3 are still being carried out.

Rafizi is sticking to his original assessment that the total cost of the project would be about RM100 billion.

MRT Corp’s own revelations showed that two out of its three lines are already costing more than the RM40-47 billion announced by the Najib administration.

Why is this difference important?

Because the whole process of planning and determining whether a public project actually benefits the public is dependent on getting the numbers right, said Rafizi.

The RM40 billion figure was first tabled in Parliament and was approved as part of the government’s budget, which is an annual plan on how it wants to spend public money.

“If RM40 billion approved in 2010 as the total cost for MRT can simply be set aside through one statement by MRT Corp as ‘no longer relevant’, it means the whole approval process in Dewan Rakyat can be deemed as ‘irrelevant’,” Rafizi said.

“There has never been any accountability for massive cost overruns in any public project.

“If Putrajaya does not have to be accountable for whatever it spends on public infrastructure projects, why bother even having an approved budget in the first place?”

And going forward, how is the public going to be assured that it will get the best bang for its ringgit in the MRT Line 3, KL-Singapore HRL and the Light Rail Transit (LRT) Line 3? – July 17, 2017.