news

MRT2's overall cost can rise to RM50b, Tony Pua says

Tony Pua

KUALA LUMPUR (July 20): While Mass Rapid Transit Corp Sdn Bhd (MRT Corp) has said it is trying to reduce the RM32 billion construction cost for the MRT2, government lawmaker Tony Pua says the project’s overall cost could balloon to RM50 billion.

“We can see the construction cost is RM32 billion (but) this does not take into consideration other costs which I am sure would rise to RM50 billion,” Pua said in the Dewan Rakyat yesterday without indicating the additional costs.

In his motion of thanks to Yang di-Pertuan Agong’s speech, the Damansara Parliamentarian warned that these debts would eventually end up as a national debt to the government.

On July 11, MRT Corp’s MRT2 project director Datuk Amiruddin Ma’aris said the analysis to reduce the cost of construction for MRT2 is still ongoing, and would take some time as it had to ensure the cost-cutting measures do not affect the safety and functionality of the project.

Pua, who is also a special officer at the Finance Ministry, said at present the debts linked to the MRT and Light Rail Transit (LRT) projects are not included in the Federal Government debt amounting to RM687 billion.

“This figure does not include government guarantees given to state-owned financial guarantee insurer DanaInfra Nasional Bhd,  amounting to RM42.2 billion and LRT operator Prasarana Malaysia Bhd’s RM26.6 billion debt,” he told the House.

The government had previously said that its total liabilities of RM1.087 trillion comprised federal government debt, government guarantees, and lease payments for public-private partnership (PPP) projects such as construction of schools, hostels, roads, police stations and hospitals.

Pua said Danainfra and Prasarana debts are serviced by the federal government because they are government guarantees.

On the top of that, the previous government awarded more than RM63 billion worth of PPP projects, committing the government to RM201 billion worth of leasing payments for the next 10 to 20 years, he added. — theedgemarkets.com

For more stories, download EdgeProp.my pullout here for free.

Like our content? Check out Narratives – where we curate stories based on topics to keep you well and broadly informed about Malaysian real estate.

Looking for property? Check out Location Scan, where we summarize all available options and facts you need in a few clicks. We have updated the tool to include MRT3 stations too.

Curious how much you can borrow? Use LoanCheck to get your maximum loan eligibility from various banks, or LoanReport to get a FREE CTOS/CCRIS credit report.
SHARE
RELATED POSTS
  1. Penang to start pre-qualification process, RFP for Bayan Lepas LRT project
  2. DBKL, MRT Corp sign MoU to develop Kuala Lumpur into 'City for All'
  3. MRT3’s construction cost to be around RM31b, and be operational by 2030, says MRT Corp