MRT Update: No property value capture plan means even the Sarawakians will pay for KL’s MRT

TRANSIT is hearing disturbing news from the Malaysian Insider. It is nothing new. The plain, same o same o story.

The. MRT. Has. Been. Conceived. Without. A. Plan. Period.

SPAD: MRT financing, project manager’s fees not finalised yet (The Malaysian Insider)
By Jahabar Sadiq
April 08, 2011


Nur Kamal said actual work on the MRT will start in November. — file pic

KUALA LUMPUR, April 8 — Putrajaya has yet to finalise the financing and project manager’s fees for the Klang Valley Mass Rapid Transit (MRT) although planning has started for initial civil engineering works to begin in November, said the regulator.

Land Public Transport Commission (SPAD) chief executive officer Mohd Nur Kamal said only a Letter of Award (LoA) has been issued to the MMC-Gamuda joint-venture as the Project Delivery Partner (PDP) but the fees has yet to be settled.

“We are working hard to finalise it and it will made public before the groundbreaking in July,” he told a special briefing to journalists yesterday.

The multi-billion ringgit MRT, which was initially estimated at RM36 billion for three lines, has come under fire for scant details, but Mohd Nur said information will be given when available.

He announced that the July groundbreaking is only for the depot site in Sungai Buloh and the start and end of the underground portion in Jalan Semantan and Jalan Cochrane, adding actual work will start in November.

[TRANSIT: Yeaah… break the ground first, erect the pillars second, think about the overall transit masterplan third, and have a tinker of thought on how the grand plan will merge and trickle down to the average lay person walking on the street last!

That’s what they did for the Jakarta monorail (see below) and it worked so well!]

The construction of pillars for the Jakarta Monorail was rushed in order to secure financing and make the project appear 'inevitable.' Despite the transparent attempt, the project was quickly abandoned.



A transit plan must be tied to land use and transportation plans at both local and regional levels. (From Germany’s GTZ Guide to Transit Planning)

He confirmed that MMC-Gamuda must meet the project deadline of 2016 or be penalised for late delivery.

“This partnership is about enhanced gain or pain for them,” Mohd Nur said, adding as the regulator, they want to make sure the project is carried out in the best fashion.

“If they can’t sign, we will ask the project owner Syarikat Prasarana Nasional Berhad (SPNB) to get a new partner. This is a priority project,” he added.

Mohd Nur said the Finance Ministry has set up a special purpose vehicle (SPV) to raise funds for the project but said the method has yet to be determined.

[TRANSIT: Wow, even after the study tour to study 1st hand of Hong Kong’s MTR property value capture, after the appointment of PDP and proposed alignments, SPAD can’t yet figure out how to make sure the humongous capex can be paid off on time (instead of Prasarana’s LRTs and Monorail debt which until now only the interest payments are served)?]

Despite that, MRT owner SPNB and the PDP, MMC-Gamuda, have already advertised to pre-qualify contractors for the elevated line, elevated station and depot.

According to SPNB managing director Shahril Mokhtar, the first tenders will be open in June or July for the first 16 packages for the elevated portion while bids for the tunnelling work for a 9.5km stretch under the capital city will be awarded in December.

He disclosed that a one-stop technical committee will evaluate the bids before recommending it to a Finance Ministry committee that will decide on the contract awards.

“It’s their money so they decide,” Shahril said, adding this was different from the current LRT extension works which is funded by bonds issued by SPNB.

[TRANSIT: The money belongs to the people, not any ad-hoc committee or body or even institution. Hopefully Prasarana will be more transparent in letting the public know on the real breakeven timeline for high rail-based mass transit (public’s awareness on capex financing of LRT extension project is still NIL) since Prasarana’s bonds are guaranteed by the Malaysian government (read: taxpayers, whether they live a stone throw from LRT or in uncovered parts in Klang Valley, or in the deep Bakun Valley in Sarawak).]

(click to enlarge): Transit Oriented Development (TOD) is the core principle behind property value capture for transit projects. The more expensive the project is, the higher the yield that will be expected out of the surrounding properties.

Which means higher plot ratio and density as you get nearer to the station. Typically, number of access to unique properties are made as high as possible, and this is the case with Hong Kong’s MTR.

[TRANSIT: To Prasarana, we want to ask: what is the plan to recoup the initial LRT and monorail capital expenditures via property value capture before the last bond mature in 2023 – in which if full payment can’t be resolved upon bond expiry, people’s money will be used to bail Prasarana out, or the ticket price has to be increased to nearly RM9 (today’s money) on average.]

But he pointed out that any contract above RM300 million would require the ministry’s nod.

The SPNB chief said some 100 firms have applied for pre-qualification for the 16 packages in the elevated part of the 51km-long MRT; the deadline for pre-qualification ends on April 13.

Those who win the contracts will have to sign a tripartite agreement with SPNB and MMC-Gamuda as the project manager, Shahril added.

[TRANSIT: We thought MMC-Gamuda was project delivery partner? Oh this is so confusing.]

Mohd Nur said the tripartite agreement will ensure contractors’ failures can be overcome by using the PDP’s expertise to complete the packages.

“They have to work hard, otherwise these guys will eat their lunch anytime they fall,” Mohd Nur quipped.

He added the government will appoint another project manager for the tunnelling work if MMC-Gamuda wins the job. MMC-Gamuda had proposed the MRT project as it was the tunnelling contractor for the SMART flood water dispersion project.

“The PDP can’t be the project manager if it bids for a job. That is why it cannot take part in the tender for the elevated portion,” Mohd Nur said.

He also added that SPNB is already working on an integrated ticketing system for both the train and bus systems, apart from ensuring that the MRT stations are integrated with the current network.

Mohd Nur also pointed out that 13 out of the 35 stations will have park and ride facilities with a total of 4,000 parking bays.

“We are listening to feedback and will have time to fine tune the network before construction ends,” he added.

[TRANSIT: Right now it looks as if SPAD only listens to those who made the loudest (and lousiest) noise – rich people in sprawled mansions and low density units complaining on visual aesthetics of concrete, and not ordinary folks on the street who are troubled by high housing and car installment – not to mention the overwhelming petrol, maintenance & toll costs.]

How about other stakeholders, whose tax bases are at risks, if the very people they voted for splurge all the money to a system that benefits a few.

Rather than creating new and compact residential and employment centers around present stations, new sprawling developments prop out in areas far from rail transit access, and fresh (and not so fresh) graduates have to fork out hefty portion of their meager salaries for expensive houses and entry-level cars. Will they benefit from the MRT system?

Property value capture lessons from Hong Kong and other cities with financially-successful transit systems require high density development around stations.

Will the land owners around stations proposed in Damansara be happy to learn that in order for the MRT to be sustainable financially, their houses will have to make way for new high rise developments?
Will the folks around the SBK corridor be prepared to the pictured scenario - high rise along transit corridors?
The MRT is the country’s biggest infrastructure project and also the largest National Key Economic Area (NKEA) project under Prime Minister Datuk Seri Najib Razak’s New Economic Model (NEM).The massive project is expected to generate 130,000 jobs in its five year construction phase. The government hopes that more than half of the population in Greater KL will use the public transport system to prevent traffic congestion.

[TRANSIT: In the 6th Malaysia Plan, 50% of population was targeted to use public transport in Klang Valley by the year 2000, and that triggered light rail construction boom. Five mass rapid transit lines (KJ, Ampang, Sri Petaling, KLIA Transit, Monorail lines + KTM extension) later and yet modal share rating failed to budge even to a quarter, what more half, of population.]

TRANSIT Says:

We are deeply upset.

Please read the story below and relate to the above reporting. Which character refers to SPAD, Prasarana, Gamuda and ‘nimby’ resident leader?

TRANSIT’s analogy: Your small flat apartment can no longer fit your family. You need a house. You earn a meager income, and you want to engage a contractor to build a snazzy-looking mansion (that looks cool, like your neighbors’) for you and your wife and your children.

But the price tag is so high that it will take 10 generations to be paid off if you can’t find a way to quadruple your income (and insist your wife on working instead of looking care of the kids, and plus, her salary must also be four times your current salary). You know there is another traditional-looking pre-owned landed and linked property down the street, that serves your family well but costs a meager one twentieth of the spanking new futuristic-looking mansion’s price.

Your parents, whose physical and financial health are deteriorating, don’t want to be involved at all (as they seem to be paying their mortgages forever) and said “It’s your money, so you decide, but when we go broke, you have to back us up because yakity yakity yak yak done this done that complaint complaint complaint (oldies’ rants and nags)”.

You don’t know how to even double your income. You can’t even figure out how to settle the previous ‘snazzy-looking’ porch renovation debt. Your wife wants to work for money, but the work can’t be located out of the backyard and the front door. You absolutely have NO plan at all to generate more money, and NO plan to limit your family’s living needs. You know the contractor will suck the money out of your retirement funds that are meant to secure your kids’ future. And your kids’ kids. And your kids’ kids’ kids… up to the tenth generation.

Would you go ahead and buy THAT house?

By the way, sometimes people say that the Klang Valley – with 5 different train systems & train technologies – is a textbook example of public transport. Actually, they are right. We are a textbook example – but not for the reasons you thought!

Kuala Lumpur's now-defunct PUTRA and STAR entities are highlighted in this educational document on transit planning failures - the taxpayers are the ultimate losers. (From Germany's GTZ Guide to Transit Planning)
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15 thoughts on “MRT Update: No property value capture plan means even the Sarawakians will pay for KL’s MRT”

  1. wrongdoings_rapidkl has been visiting the Transit forum for years. It gives him/her the impression that this is an anti-Govt website. With Sarawak in April 16 and General Election expected soon after, attacks has been intensified. Are these people writing on behalf of their political masters?

    wrongdoings_rapidkl wish someone can come forward and prove him wrong.

    Those who write in this blog are advised to watch their words. They should be grateful that they are in Malaysia. If they live in Singapore, they will be sued for defamation.

    1. @Wrongdoings_rapidKL

      I have to say that those are interesting observations. Totally wrong, but interesting nonetheless.

      TRANSIT is not pro or anti government, opposition, PKR, RPK, or KRP (whatever that might be). TRANSIT is not a political organization.

      Wrongdoings_rapidkl and any one else is totally free to visit other websites if he/she/they feel(s) uncomfortable with the fact that TRANSIT is not political and is ready and willing to question public transport & development planning in Malaysia as is the right of the Malaysian public.

      The members of TRANSIT know who they are. Perceptions can be disputed but facts cannot. The record for public transport in Malaysia is clear. The amount of money being spent is clear. The planning direction is clear. The results are especially clear.

      TRANSIT as an organization does not have to prove itself.

      Regards, Moaz for TRANSIT

  2. According to@Wrongdoings_rapidkl comments, I bet he does not really know the real picture of our Malaysia public transport. He definitely does not take public transport everyday.Well, the recent big arrest for graft and corruptions aren’t clear enough?? My comment is always based on true hard facts. Many Malaysians know the real dark truth whether you like it or not. Furthermore, what do you think Malaysian government can do to improve our public transport with RM105 billion of graft money per year?? It’s been more than 10 years, every year the graft money is RM105 billion. Do you think our government still need to borrow money to build MRT system and improve other public transportation system nationwide if we have this kind of money every year??? So Wrongdoings_rapidKL. Do you think I’m supporting any political party or I’m just stating the fact?? Even our Prime Minister admit that every year, Malaysia is losing out approx. RM105 billion due to graft and corruptions. Do you think he need to make this statement if none of these things happen?? Whether I’m just stating nothing but pure true facts or I’m supporting the oppostion political parties it’s your right to make your guess and speculations. All I know is I’m just stating hard true facts, I’m totally fed up already!!! With all those money, do you know how many poor or hardcore/needy Malaysians can be saved???!!! THINK THINK THINK!!!! Don’t just support the government BLINDLY AND RECKLESSLY!!!

  3. DO YOU KNOW HOW MANY SERIOUS GRAFT AND CORRUPTIONS INCIDENTS HAVEN’T BEEN EXPOSED YET???!!! WHAT THEY ARE ARRESTING NOW IT’S ONLY THE TIP OF THE ICEBERG!!! EVEN I HAVE TO BE DETAINED/ARRESTED UNDER ISA I ALSO HAVE TO SPEAK THE TRUTH, NOTHING BUT THE TRUTH!!! I CANNOT COVER UP MY CONSCIOUS AND HUMANITY AND PRETEND NOTHING HAPPENED!!!

  4. ANYONE HERE CAN TELL ME IS THE GRAFT AND CORRUPTION PROBLEMS IN SINGAPORE IS AS SERIOUS/HORRIBLE AS MALAYSIA. HOW IS MALAYSIA WORLD RANKINGIN GRAFT AND CORRUPTIONS COMPARE TO SINGAPORE??!! A PUBLIC SERVANT CAN EVEN GET FIRED FOR RECEIVING A BIG HAMPER IN SINGAPORE. MALAYSIA NO…………….., ALL THE GOVERNMENT WILL DO IS TRANSFER THE CORRUPTED STAFF TO OTHER STATES OR DEPARTMENT IF THE COURT OF “JUSTICE” DID NOT MANAGED TO NAIL HIM TO JUSTICE!!!! TEPUK DADA TANYA SELERA!!!

    1. Jeffrey

      TRANSIT thanks you for your enthusiasm but we would appreciate it if you would not post the same comments in 3 different sections of our website.

      In addition, we must ask you to stop using capital letters in your comments as the convention is that capital letters = shouting.

      This does not encourage the flow of discussion & debate.

      Now, wrongdoings_rapidKL has himself/herself to deal with – we’ve already said what we want to say in response to the comments made.

      Let’s move on, shall we.

  5. The attacks delivered in response to comments written by wrongdoings_rapidkl on April 8 is not surprising.

    The comments by Jeffrey truly represents his true character. Wrongdoings_rapidkl has read many of his comments. It seems like for him, any form opinion that does not tally with his will be wrong. Attacks comes first. This is followed by all sorts of names and abuses. To advise the relevant authorities how to make improvements is a noble effort. But to oppose for the sake of opposing is POLITICALLY MOTIVATED. He has shown that he is no diffrent than a samseng internet, or a web thug.

    He and another person claimed that wrongdoings_rapidkl is not a public transport user and hence does not know the true picture of Malaysia’s public transportation. If this is the case, please allow wrongdonigs_rapidkl to issue a challenge to them: Pls tell the world how wrongdoings_rapidkl come out with a long list of incidents in The Star Blog. If they can’t provide a good explaination, they are advised to withdraw this accusation.

    Wrongdoings_rapidkl has mentioned previously that he/she USES public transport daily. It is not perfect but served him/her well. This is why he/she wants improvement. This is why he/she regularly send complaints to suggest @rapidkl.com.my. This is why he/she keeps a record of incidents and make it available in The Star Blog. Improvements can be made by taking correct steps, but not by engaging in a shouting match as practised by many public transport bashers. Wrongdoings_rapidkl knows who they are. He/she also believes that the bashers knows that he/she is referring to them. He/she will appreciate if he/she is allowed to sincerely advise them to stop these.

    He/she also dislike people’s view of public transportation. It seems like Malaysians are a pampered lot. They expect a ride from their doorstep of their home to their destination. For instance, if their favourite coffeeshop is opposite their house, will they drive or walk for lunch? Will they double-park right in front of the coffeeshop or park legally and walk in from a few shops away? Is it illegal under the law to walk for a few minutes? Remember the remarks given by his/her colleague? “Wah, so carm oh (What a terrible life), buy a car la.” What message does the colleague try to convey? Public transport users have a terrible life? Based on the same logic, does that mean that people in Hong Kong, Singapore and big cities also have terrible life as they use public transport?
    Wrongdoings_rapidkl find this extremely appalling. No city in the world have perfect public transportation. If this is justification for driving, don’t blame anyone if public transport suffers from low ridership.

    Moaz wrote:” Wrongdoings_rapidkl and any one else is totally free to visit other websites if……..” This is proof that he is no diffrent than any person who shout YOU TAK SUKA YOU KELUAR DARI MALAYSIA loud. He has shown his true colours as a dictator.

    Wrongdoings_rapidkl has spoken out what he/she sees necessary. However, he/she knows well that no one will listen. Worse still, he/she knows that once again, he/she will come under relentless attack from public transport bashers. Sometimes, he/she just wonder if anyone in this world have a life as meaningless as his/her.

    He/she does not care what people in this page or any site think of him/her. He/she will continue to voice out when he/she sees fit and continue to post in The Star Blog. All you have to do is to wait and see. Just wait for his/her next list in The Star Blog.

    He/she believe that someone in RapidKL or any public transport provider have/will place a bounty on his/her head for his/her writings in The Star Blog. And he/she will not be surprised if this is repeated by anyone in this site.

    1. Wrongdoings_RapidKL

      In your post you made a number of unsubstantiated comments about TRANSIT. You have suggested that we have political leanings and are acting on the instructions of ‘political masters’.

      TRANSIT is an apolitical organization – we are not interested in party politics or anything similar.

      We are interested in improving public transport policy-making because this is a necessary part of improving public transport. There must be a push from below to improve service and from above to improve regulation.

      There is a significant difference between politics and policy, and it would be better to understand that difference before making comments.

      Interestingly enough, you commented that in Singapore our posting would be considered defamatory – yet you make allegations without substantiation – certainly defamatory.

      Not only that but you have continued to make comments and even alleged that there will be threats against you from RapidKL and TRANSIT.

      This is quite defamatory and escalates the nature of your earlier (unsubstantiated) comments.

      In response to our comments that there are other websites discussing public transport where you can go that feel less “political” you alleged that I am no different from those who shout and tell you to leave if you do not like things. You also labeled me as a dictator.

      Again, these comments are unsubstantiated and defamatory – not to mention unkind and wholly unnecessary.

      All those who participate here need to understand that TRANSIT is an unstructured, democratic organization … but we are an organization. We have rules about showing common courtesy to other members and posters/ commentators as well as to the moderators of the website.

      Like any organization, if you choose to participate you agree to uphold the rules of that organization. If have made the choice to not uphold those rules, then you have chosen not to participate.

      Regards, Moaz for TRANSIT

  6. @Wrongdoingsrapid_KL

    You can say and curse at me whatever you want to say so. BUT THE FACTS ARE FACTS!!! Your statements, “presentations” and words are TOTALLY USELESS!!! They cannot justify or change all the TRUE GENUINE FACTS I stated!!! That’s all I want to say. Thank you!

    1. A reminder:

      All those who participate here need to understand that TRANSIT is an unstructured, democratic organization … but we are an organization. We have rules about showing common courtesy to other members and posters/ commentators as well as to the moderators of the website.

      Similarly, comments made on this website must be substantiated – you cannot claim “facts” without proving these facts.

      Like any organization, if you choose to participate you agree to uphold the rules of that organization. If have made the choice to not uphold those rules, then you have chosen not to participate.

      Regards, Moaz for TRANSIT

  7. @Wrongdoingsrapid_kl

    You should be grateful that I’m such a straight forward person. I dare to say I’m much better than those people pentending to be angel and saint in front of you than stab you at the back so fast that you can’t even blink your eyes.

  8. @@Wrongdoingsrapid_KL

    it’s very nice of you to overgeneralized transitmy as anti-government but that is sincerely not the case.
    Transitmy asks tough questions but most of them are in the better interest of improving public transport.

    If you think the praising of penang public transport as bias or whatever. Then, you should really understand that it’s not.


    [TRANSIT: some content seen as inappropriate has been removed]

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