Hornbill Unleashed

July 25, 2017

Defending Dr M, the father of Malaysia’s modern transportation

Filed under: Politics — Hornbill Unleashed @ 8:01 AM

Since Najib Abdul Razak launched his very own “Kajang Move”, UMNO has been consistently attacking Mahathir’s legacy in revolutionising the Malaysia’s public transportation network.

I find it odd since the so-called “Mahathir’s Public Transportation Cronyism” took place under the Umno-led government.

If Mahathir was truly a liability to Malaysia, why did Umno use the LRT, ERL, KLIA, Monorail etc as political capital during past elections?

If  Mahathir’s legacy was truly a failure, why didn’t the Umno-led government do anything at that point in time?

Heck, many ministers today were in Mahathir’s cabinet at that time. From people like Najib to Hishammuddin Hussein.

What did they do then? Mahathir’s so called cronies are still Umno warlords today. (Former chief minister of Malacca, Ali Rustam played a pivotal role in our Monorail woes).

Can you have your cake and eat it as well?

You can’t have your cake and eat it too. If Mahathir is to be blamed, Umno must be held accountable as well.

Honestly, I am glad that Najib continued Mahathir’s momentum in developing Malaysia’s public transportation network – from the MRT to the LRT extension projects.

I, however, scoff at Najib’s attempt to label Mahathir as a “failure” in developing Malaysia’s transportation infrastructure.

There are several reasons why Mahathir gave the project to private companies/cronies Firstly the Light Rail Transit  (LRT) was still new.

The first LRT was established in America in 1978 – which means by the time the construction for LRT started in 1993 in Malaysia, the concept of LRT was still new to many countries.

Malaysia was the first country in Southeast Asia to embark on the LRT project. When you start from scratch, you will need all the help you can get from private investors to make the project work.

Lack of dedicated organisation 

This means private companies are well placed to conduct research and studies for the project in contrast to the government at that time. Keep in mind, the government at that time didn’t have a dedicated organisation to initiate a study on public transport.

The Sistem Transit Aliran Ringan (Star) is under UK’s Taylor Woodrow plc, the Employees Provident Fund and the Lembaga Urusan Tabung Haji. Taylor Woodrow is experienced in providing rail infrastructure.

The primary case would be their involvement in delivering a number of high profile rail infrastructure schemes including major elements of the Channel Tunnel Rail Link and structure enhancements along the East London Line.

Albeit, the Channel Tunnel Rail Link came in 1996, it shows the pedigree of the company that Malaysia roped in.

Renong Berhad, a Malaysian company that was granted the project for Putra LRT is a Malaysian brand trusted to handle mega projects like the construction of the North-South Expressway.

It was also critical for us at that time to not just rely on foreign experts and companies. There must be some form of technology transfer and gradual development of local talents.

Yes, it will be costly in the short-term, however, the long term gain will enable Malaysian companies to prosper in the future as they have already developed the local capacity to do so.

I dare say that the trained workforce and local capacity which enabled the MRT lines to be built today originated from Mahathir’s past investments in our local talents.

In both circumstances, it was established that the private companies that were tasked with such projects were not random companies and were highly capable and had a sterling portfolio.

Bailout

The first problem that both STAR and Putra-LRT faced was a lack of ridership that impacted their ability to pay back their commercial loan. Unlike today, LRTs and Monorails were alien to the population back then.

It was also a time where oil was ridiculously cheap and Proton was booming, ergo, making public transportation a secondary option of transport. Today, due to the inroads made by the past, people are used to the concept of public transportation and ridership has increased tremendously.

The problem of poor ridership will definitely be better managed today as a lot of live traffic data is available making traffic analysis much easier, to study key locations for the setting up of the MRT stations. It’s never easy to start up a multi-billion public transportation channel for the very first time in Malaysia. Mahathir had the audacity to do so which helped smoothen the process today.

Asian currency meltdown 

The 1997 financial crisis made it worse as it caused bus conglomerates like Intrakota which were unable to service or purchase more buses to cater or create the demand to encourage the use of public transportation.

This led to a “trickle down effect” which hit the public transport system at that time which caused the downfall of the private companies in charge of the LRT and Intrakota.

Failure to bail out these companies would lead to a total freeze and ruin of the already established infrastructure. We have seen the same done in the UK (London Railway). A necessary evil for long-term progress.

It is important to note, that it was not a mere system of bailing out. The government took additional steps by establishing Prasarana which then purchased the Putra and Star LRT from these companies as well as Intrakota.

This led to Malaysian public transportation coming under one roof. Prasarana which then later made the expansion of the LRT and MRT lines much easier.

Monorail price increase 

This is bound to happen with any government project. Something that we wish to avoid but it happens, especially when we invest in something that is novel.

A parallel of this can be seen when Najib announced LRT3 at the cost of RM9 billion and MRT2 at the cost of RM23 billion in the 2015 Budget Speech.

In 2016, the cost had escalated to RM10 billion for LRT3 and RM28 billion for MRT2. In his Budget 2016 speech, however, it was later stated by MRT chief executive officer Shahril Mokhtar that the actual cost for LRT is not finalised yet and could be at an estimated value of RM35 billion to RM 40 billion.

So why are we already praising Najib’s MRT project? Is it not a bit too early to ring out our applause?

Deputy Finance Minister Othman Aziz said that the MRT fares will be used to pay off the bonds used for the project.

This, heavily banks upon the number of ridership, which means this project is still in debt as we are speaking.

Unfair comparison 

It is unfair to make a comparison with the LRT which took a hit in the 1997 Asian Financial Crisis. When the LRT lines were first introduced by Mahathir’s government, no one foresaw the potential risks at the time. It took years before we fully grasped the issue. The same thing could happen to Najib’s projects.

What is important right now is for various parties to scrutinise the current system to ensure quality is always maintained to avoid loss of ridership. This is not a debt-free project.

It could be a ticking time bomb if ill-managed, especially when taxpayers money is used to fully finance the projects.

Currently, the sukuk rate is at 3.62 percent and 5.51 percent. The longer the time we take to pay, the higher the cost will be.

When the opposition scrutinises the multi-billion dollar MRT projects, it is for a very good reason. It is to fulfil a duty to the people of Malaysia and to ensure that no hanky panky business goes on.


Source : Malaysiakini by Syed Saddiq Abdul Rahman
SYED SADDIQ ABDUL RAHMAN is Parti Pribumi Bersatu Malaysia (Bersatu) Youth chief


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