The Finance Ministry will set up a special purpose vehicle (SPV) to raise funds for the RM36 billion mass rapid transit (MRT) project in the Klang Valley, said the Land Public Transport Commission (SPAD) today.
SPAD CEO Mohd Nur Ismal Kamal however said the method of funding has not been finalised yet.
“There will be a special purpose vehicle under the Ministry of Finance which will be in charge of organising the financing,” said Nur Ismal at a media briefing here today.
“They have not finalised the type of funding. They may issue bonds or use capital market instruments,” he added.
Nur Ismal also stressed that the project delivery partner (PDP), MMC-Gamuda Joint Venture Sdn Bhd, would bear any cost over-runs.
“If there are cost over-runs, the PDP will shoulder the costs,” he said.
The largest infrastructure project in Malaysia, which will be funded by the government, is expected to transport about 60,000 passengers per hour per direction.
“That is why we decided on the MRT. It may carry more than 60,000 passengers per hour per direction,” said Nur Ismal.
He added that a bus rapid transit (BRT) system could only carry a maximum of 16,200 passengers per hour per direction.
“The BRT is not practical as the main (transport) solution here in the city,” said Nur Ismal, pointing out that the BRT required multiple-lane highways.
He also said the light rapid transit (LRT) system could carry a maximum of 31,500 passengers per hour per direction.
The first MRT line will run between Sungai Buloh and Kajang through the city centre.
“Construction is expected to start in July 2011. Overall completion time will be from 2011 till 2016,” said Nur Ismal.
“There will be four interchange stations. Two with the KTM at Sungai Buloh and Kajang. One will intersect with the Putra LRT at Pasar Seni, and one with the Ampang line at the Maluri area,” he added.
SPAD chairman Tan Sri Datuk Seri Syed Hamid S. Jaafar Albar said the 60 km MRT line would carry 400,000 passengers daily.
“The line will run through Kota Damansara, Mutiara Damansara, Bandar Utama, Taman Tun Dr Ismail, Bandar Tun Razak, and Balakong,” said Syed Hamid.
Nur Ismal also stressed that the RM36 billion construction cost was an estimate by MMC-Gamuda Joint Venture.
“The RM36 billion is an MMC-Gamuda estimate. It is not the final figure yet,” he said.
The SPAD CEO also said it was crucial to start the MRT project next year in order to meet its 2020 deadline.
“The deadline is 2020. For each year of delay, there will be a 5 per cent increase in material cost,” said Nur Ismal.
“It will also present opportunity cost to other NKEAs (National Key Economic Areas). So it is critical to start fast,” he added.
The SPAD CEO pointed out that the MRT project was prioritised over other transport plans under SPAD’s integrated public transport plan, which will be released in September, because rail transit formed the “backbone” of the city’s transport system.
“We put out this rail plan first because rail is the backbone,” said Nur Ismal.
Recently, the DAP had accused Prime Minister Datuk Seri Najib Razak of rushing the MRT project before the implementation of SPAD’s detailed public transport plan in September.
Nur Ismal pointed out that there would be an estimated 9 million public transport passenger trips daily in 2020, of which 50 per cent was expected to comprise rail passengers.
“National Key Result Area (NKRA) initiatives will improve the existing transport system and take 1.3 million trips. So, the remaining 3.2 million passenger trips will be served by the MRT,” he said.
Nur Ismal added that the tender process was expected to start in April.
“All work packages except for tunnelling will be an open tender process,” he said.
“As the PDP, MMC-Gamuda is only allowed to tender for tunnelling works because very few local companies have tunnelling experience,” added Nur Ismal.
Last Saturday, Najib said the implementation of the project is expected to generate a gross national income (GNI) of between RM3 billion and RM4 billion beginning next year until 2020.
He had said that between RM8 billion and RM12 billion was expected to be generated in terms of spinoffs from the construction of the MRT project.
The MRT is an entry point project identified for the Greater Kuala Lumpur/Klang Valley National Key Economic Area under the Economic Transformation Programme.
