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Saturday, July 9, 2011

First MRT line likely to cost RM20bil

KUALA LUMPUR: Although the actual cost of the country’s first mass rapid transit (MRT) system will be disclosed in September due to a 50% reduction in land acquisition and other tweaks to the initial alignment, estimates have put the price tag for the first of three lines at around RM20bil.

Land Public Transport Commission (SPAD) CEO Mohd Nur Kamal said more time was needed to finalise the cost as the revised alignment was only recently approved given the changes to accommodate public feedback.

“We have done a lot of changes as we are responsive to public feedback and are looking at August or September to nail down the actual cost,” he told reporters after the launching of the MRT, dubbed My Rapid Transit, which was officiated by Prime Minister Datuk Seri Najib Tun Razak yesterday.

The launch revealed the final alignment of the 51km Sungai Buloh-Kajang MRT line, of which 9.5km will be underground. The line will have 31 stations.

The final alignment not only reduced land acquisition cost, has led to better integration with existing rail network and reduced the number of stations but has become more cost effective than the initial alignment.

A SPAD official said the new alignment would run across 70% of road reserve land. The remaining 30% of the line will traverse private land which will be acquired to build the tracks.

“The tweaking of the alignment concentrates mainly on Taman Tun Dr Ismail, Bukit Bintang, Cheras and Kajang,” said the official.

An analyst familiar with the matter estimated the cost of the first MRT line could be around RM20bil. “And the cost of the underground works may be RM7bil to RM8bil,” he said.

The MRT’s project delivery partner (PDP), MMC-Gamuda Joint Venture Sdn Bhd, in which Gamuda Bhd and MMC Corp Bhd hold equal shareholdings, will be responsible for managing the project and its cost.

The analyst that was present at the event was also surprised that the remaining two lines were still under study.

The initial joint-proposal by MMC-Gamuda called for three MRT lines, including one circle line to be built at a then price tag of RM36.6bil.

“We need to see the whole picture and integration. But, the cost of the three lines that was quoted in 2009, could have ballooned up to a total of RM50bil by now, considering the increase in construction raw material prices,” he said.

It was reported the Government might plan to sell as much as RM30bil Islamic bonds under a programme to help finance the MRT. A special financing vehicle would be formed by the Government to raise the funds which would be used for the country’s biggest infrastructure project to date.

Meanwhile, Najib foresaw that the MRT would improve existing real estate value and should be a catalyst to new property development adjacent to the MRT line.

“It is estimated that new real estate development along the line could reach as much as RM15bil to be completed in a decade.

“Additionally, gross national income (GNI) of about RM3bil is expected to be churned out based on the 20% increase in gross real estate value in terms of commercial and residential property in the 1.2 million sq ft of area in the radius of 0.5km to 1km from the MRT line in 10 years time,” he said in his speech at the launching.

Residential and commercial property earmarked for development along the MRT lines are located in Cochrane, Rubber Research Institute land in Sungai Buloh, Menara Warisan as well as Bandar Malaysia Sg Besi.

Also, Najib added that the GNI derived from the construction works of the MRT was expected to be RM3bil to RM4bil annually starting from this year to 2020.

By The Star

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