Monday, May 7, 2012

white elephants ?

I cannot help but to agree with what is written by Mr Guna segaram in the star on july 2010. I happened to go the the KLIA airport last week to send someone for a flight in the afternoon around 4 pm. I noted that the check in counters were 20% utilized, coupled with the dim lightings of the airports, the place looked so gloomy.

So when Mr Segaram mentioned about the white elephants, then he was right, but may be it is worst, it is the dying white elephant.

Then the news about the MRT. For such a small city like KL, we had uglily odd way of designing our transport system. We had two systems of LRT, the Star and Putra. They were decided during the previous PM, Tun Mahathir, to be managed by separate companies. The logic of why this was done was a certain surprise for even a first year of students of transport economy. Probably the wisdom our ex PM would be able to explain it. However all of them were passed back to tax payers to pay.

I feel sorry for Malaysian..

The extract from the start..

saturday July 24, 2010

Putting the cart before the horse

THE white elephant that we used to talk about for many years was the KL International Airport (KLIA), built at a reported cost of RM10bil and completed in 1998 at the height of the great Asian recession.

Its pristine, pretty halls and walkways remained empty for years and still are during certain times to this very day. In fact, the low-cost carrier terminal, across from it at the same landing facilities, is a veritable hive of activity compared to the main airport.

Now there are a slew of other projects already in the pipeline and being built which are likely to be ready soon but with no one to supply their services to. And their total cost will eclipse that of the KLIA several times over.

They include the RM30bil-plus double-tracking project (three times the airport cost and the largest single infrastructure project to date), the over RM7bil Bakun dam project in Sarawak, and the estimated RM9bil Pahang-Selangor water transfer project.

There are others but these alone amount to a heart-stopping RM46bil. In contrast, the recent subsidy cuts saved just RM750mil, less than 2% of this figure.

On top of that, we may be rushing into a major mass rapid transit (MRT) system for Kuala Lumpur which could eventually cost as much as RM50bil without first giving proper consideration to the infrastructure and throughput necessary to support such projects.

Add up all the various projects and we are talking about over a massive RM100bil at stake. We need to give proper thought as to how to handle these projects and indeed whether we need any of them in the first place.

It is too late for that as far as the double-tracking project is concerned because the ball has been set rolling. Already, there is enormous wastage, with expensive infrastructure lying idle three years after completion.

According to reports, the KL-Ipoh sector, costing RM6bil, was ready in 2007 but the maiden electric service will start only this year, three years later. But what KTM Bhd is talking about is merely cutting travel time between KL and Ipoh to two hours from over three hours.

Where are the plans for all that cargo that KTM will move by making use of the expensive double-tracking project and the explosion in the number of people who would use the service? Already three years have been wasted for the KL-Ipoh sector.

The entire project is supposed to be completed in two years but we don’t have any idea how this super expensive RM30bil project is going to revolutionise rail transport in the country.

Critics had already pointed out long ago that KTM’s infinitesimal revenue of a mere RM400mil when the project was proposed a few years ago will have to increase many times before it becomes financially viable and that neither the current passenger nor freight throughput warrants such expenditure.

For instance, 8% of RM30bil, the absolute minimum return one should be talking about, is RM2.4bil! KTM’s revenue – not profit, it is making losses – is just one-sixth of that. Under such circumstances it is unacceptable that there is a three-year delay to start the KL-Ipoh service using the spanking new double tracks and electrified system.

Already, the odds are stacked against the double-tracking project being viable by any measurement considering the expense. That will only be exacerbated if proper steps are not taken to utilise the huge capacity – theoretically almost limitless as trains can continue travelling in both directions all the time – which is coming on stream.

As with a lot of infrastructure planning, the double-tracking suffers notoriously because enough effort has not been put into maximising the use of existing facilities before embarking on this massive, premature expansion.

Across the South China Sea, another gargantuan problem is coming up as the Bakun dam is readied to start producing power. This can produce power up to 2400 MW, far in excess of Sarawak’s requirements. In the absence of the undersea cable project to bring the power to the peninsula, there is no one to take the power up when it comes.

Right now, there is no one to take the power. The aluminium smelters are not up (one wonders whether that is the right industry to have but that’s another story) and the federally owned dam is yet to sign a pact to sell power to the Sarawak electric utility.

If you include all costs, including that of delays, etc., the damage might well be over RM10bil instead of the RM7bil now being touted as the figure. What happens if the aluminium plants don’t take off?

And then there is the Pahang-Selangor water transfer project where tunnelling works have already started even before the acquisition and approval of land to build the water treatment plant. What happens if the treatment plant is never built?

We should not make the same mistakes with the proposed MRT project, which is being heavily pushed by the Gamuda-MMC consortium that is eyeing the tunnelling works of some RM12bil. There is no hurry. Take the time to study it. Maximise the existing light rail transit, bus and feeder systems before going for an expensive MRT system. There are many different ways of skinning a cat.

Ditto for other projects.

Before we start building expensive carts, we must absolutely make sure that there are horses to pull them, and goods and people to transport. Otherwise, those bright, shiny conveyances will look nice for a while but will fade and discolour with disuse and neglect.

How long will it take before we know how to manage large projects carefully and stop this unnecessary drain on the country’s precious resources? Imagine what we can be doing with all the money saved.

● Managing editor P. Gunasegaram can only express shock, awe, dismay and disgust at the way we manage some of our large projects.


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