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Sakmongkol ak 47

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Saturday, 17 July 2010

The 43billion Question


Metrostroy and Metrowagonmash. Who is this? This is the contractor that built the Moscow Metro. I was watching the History Channel the other day, and the program showed how the Moscow Metro was constructed. Not only is the system functional it is also aesthetically pleasing.
I suggest if the government wants to open its bid to people who may be interested in building the RM43,000,000,000 or more KL MRT system talk to them. The M&M has got the experience and the technology. Gamuda or MMC know how to do the MRT the conventional way- by teaming up with another foreign partner. Let's cut this middleman stuff and employ M&M directly. Better still, open the tender to international bidders who have the technology and experience to offer us competitive bids.
If contractors come from non English speaking countries, ask them to send somebody who can come and speak English. Just don't ask a Perimekar copy cat who then employs some foreigner( usually the female kind) to act as interpreter. Let's do an honest deal for once.
The problem started when you want to concentrate everything in KL. Now you must do a traffic and people dispersal system. It's ok then- things were already done and we have to live with it. But let's correct the problem by doing the right thing.
I am still struggling to reconcile this: we take away subsidies and save some RM 750,000,000 and that can be used to finance the RM43billion MRT in KL? The pundits seem over overzealous to point out that it was Gamuda who suggested that savings can be made from taking away subsidies and because of pointing that out, Gamuda goes one notch up to deserve the award of the contract? Are these people being paid by Gamuda or what?
There's one catch- Gamuda and MMC are interested only to do the tunneling contract worth RM 14 billion and the hardware side of the MRT. They don't want to operate the line? Who operates the line then?
I think it's better to invite bidders who can offer us the whole package- build the system for us and operate the system for a number of years using local talent.
How can Gamuda be so cocksure of getting this project and has even started to survey and soil test works? It has been telling everyone that it has an 80-85 per cent chance of clinching the job, which could start as soon as early 2011, and had commenced soil investigation and survey works to prepare the groundwork for the project.
Who are the appointed government consultants who have been asked to do the feasibility studies on the proposal by Gamuda? I am hoping it won't be the same consultant who was asked to evaluate who can do the double tracking from Gemas to Johor. The project was originally given to China Railways but then when the government appointed a project consultant to do a feasibility study, the job was given to China Harbours- which is a company specialising in the building of ports. I hear, what the consultant did was google the names of a few contractors and carried out a process of elimination. At the end of the day, China Railways who was approved by the Cabinet to do the double tracking was also eliminated.
Suppose the same tactic is used. Consultants can always Google any number of experienced MRT builders and then carry put a process of elimination taking into account all cock and bull stuff just to have these disqualified. At the end of the day, Gamuda and MMC, will come out smelling like roses.
How do we fund this massive project? Surely not from the paltry savings of RM 750 million savings from subsidy? The other way is to sell government bonds. Who wants to buy bonds from the government if a minister says our government can go bankrupt? We have to get AAA-rating for any papers to be issued.
Just what are the economic benefits will the people get other than gawking at the made-for exam points of saying that for every RM100 million that the government would spend on the MRT, RM25 million in annual economic benefits would be generated for the country in the next 50 years, including increased productivity, lower accident rates and lower carbon emissions.
Can increased productivity be gotten from a cheaper transport system and less carbon emissions achieved elsewhere?

23 comments:

Anonymous,  17 July 2010 at 19:41  

I thot it was RM 36 bil a few weeks back...project belum start dah naik RM 7 bil?..20% increase tu..

Must be a great project for some.

Anonymous,  17 July 2010 at 19:45  

Dato Sak, "...How can Gamuda be so cocksure of getting this project and has even started to survey and soil test works?..."

You are not serious? or being naive?

Gamuda IS cocksure. And Gamuda WILL get the contract... come fire or high water. It is not IF , but by how much.

What you should ask is: Who owns shares in Gamuda.

Remember: The Gamuda-connection and the fall of Perak Govt to BN-UMNO. Everybody knows, including top UMNO leaders.

Anonymous,  17 July 2010 at 20:10  

If the government can put forth a convoluted logic that a cup of coffee now should be increased by a mere 1.25 sen because of sugar price hike then it will put forth any gobbledygook to fool the people with the connivance of newspaper editors.
Gamuda's eventual success in the bid could be linked to the Perak power grab and the palace.
"You help me, and I help you"

Wenger J Khairy 17 July 2010 at 20:44  

Increased productivity from the MRT? kah kah kah. As sure as RM 750 million payment per year can fund a RM 43 billion project.

Anonymous,  17 July 2010 at 21:59  

So now everybody begins to see the whole hog!

Gamuda is no Gamuda (Berwibawa) if PR Perak was not turned turtle....

Smart move!

But we are talking about 43 billions tax-payers money to be injected into a project of lack of discern study and an ad hoc politico-commercial decision! In layman terms, horse-trading....

I for one will support Dato's sermon on the mount. Najib administration should not simply hush-hush dealing with the local corporate unavoidably it will cause to be seen as a crony dealing and collaboration!

For such a size of job, we need a very strong profile Consortium which has all expertise and experiences, financial capacity to back for the success. Can Gamuda alone sustain, or it will be another bail out case?!

Just like PKFZ, the 43-billions could likely be only the beginning of more embezzlement and squandering!

Dato's design-built-operate & handover is a well accepted concept even the more advanced Nations adopted. With the local skills we have, boleh in the sense that the beams can crack, the tunnel can flood, the floor slap can collapse, can we sustain the damages?! Can the rakyat sustain the double or triple costs of repair?!

Or another abandoned white elephant at the end of the day?!

All these the Government must answer the 43 billion questions!

And PR, what say you? Still for the peoples???

walla 17 July 2010 at 22:31  

We cannot afford a forty three billion ringgit commitment. The fiscal strategy for the country going forward should be to achieve what is needed with the least expenditure and financial commitment. All projects.

Just bring back better mini-buses sans the smoke. Instantly, jobs for urban poor, convenience for the people young and old, and most importantly, cheap transport without a gargantuan financial millstone on the necks of the next generations.

The model here is (a) for the provider, affordable equipment that will call for low outlay, (b) for the customer, pay only when using, reaches more destinations, (dis)embarks anywhere (not necessarily at bus stops), and (c) for the nation, minimal financial outlay. This may add more competition on the big bus companies but they can remodel themselves; there are options. Congestion is only theoretical. In fact with more mini-buses there should be less cars on the roads.

The thing to be clear about is we don't have a healthy financial cache to procure big projects when our customer base will not be big enough to raise per capita profits and reasonable time-based ROIs for such projects. One must remember, price it too high at a time when people have to tighten belts because of desubsidization and GST, and the project will become a white elephant; price it too low and even maintenance costs cannot be covered. For a project this big, the maintenance cost will be very high.

When times are not going to be good, simple and cost-effective solutions are best. Only do big ticket premium items when customer is already well-off enough to pay for extra-comfort. Now it's already a bonus to be able to get to/from office on time.

Just think forty three billion divide out into all the public transport systems throughout the country, and real productivity will happen. After all what is the desired result? carry you from here to there in shortest time and lowest cost.

Of course, this discussion will only receive a five-second attention span because the deal has already been wired, together with the swiss bank accounts.

All just to acquire a State, it seems the reason is good enough to accelerate the bankruptification of Malaysia.

Sayonara.

Anonymous,  17 July 2010 at 23:13  

Sak

No public transport system in this world can make big profit. The operator ( mostly govt ) will be happy if they can break even.

A cheaper solution is using the simple and basic electric tram system. It's famous until the late 50's.

When building a tram track, it will occupy one lane of each way and create more traffic jam for those who prefer to drive on that particular road. Sooner or later they will get fed up and switch to using the tram.

The only concern is the connection between the lines / areas and the public safety. Not to mention the Mat Rempits and lady drivers.

Maybe KTM should lead the way.

donplaypuks® 18 July 2010 at 00:37  

Bro

The options are not that difficult to analyse. A $43 billion public transport whack like this can be sustained if:

1. Govt finances 100% construction and runs it on a full commercial basis in which case few will be able to afford the high ticket cost. Many will revert to their proton sagas and myvis. The project will fail from financial and traffic congestion alleviating perspectives. OR

2. Govt is 100% Builder & Operator and run it on heavily subsidised basis which means going back to 'Subsidy/No Subsidy' debate. Finance cost if borrowings are from EPF/Khazanah/PNB/Socso/Valuecap/Mavcap etc. on $43 billion at say 5% for national service = $2.15 billion per year. Then of course, there’s all the operating and maintenance costs! OR

3. Govt builds and gets a private operator to run it. The private operator will fail if he cannot charge commercial rates. If commercial rates are too high, the people will revert to their proton sagas and myvis. So, private operator too will have to be heavily subsidised. OR

4. Private Company takes 100% on a BOT basis with concession period of say, 50 years. This failed in M’sia when the Govt had to bailout the LRT companies. I can’t see any local or foreign companies undertaking this BOT project in M’sia. The history of failures by private entities operating LRT type transport systems is there all over the world for us to see. That’s the exact reason Gamuda et al only want the easy money con-sulting and tunnelling jobs and walk away from the managing the solution on a long-term basis.

I have NOT A SHADOW OF A DOUBT that an integrated taxi, bus and rail transport system will be the long-term solution to mass transport and people moving. It’s ridiculous to have a million or more cars (increasing every year) going in and out of KL, JB and Penang every morning and evening with the additional problems of pollution, accidents and petrol cost.

Therefore, the best solution is likely to be a public-private Joint Venture involving Govt and a large MNC and/or listed company. It cannot be done without Govt subsidising it. Not all the money has to be raised in one go as construction will take some 5 years and finance can be raised in stages as lines are made operational. Paying a few billion $ a year in interest and running costs year for 50 years is a better option than leaving it entirely to the private sector and then having to bail it out. Equally, I don’t trust Govt to build and operate it 100%!!

If Govt goes for open tender, takes over the AP’s 100% (there’s at least $2 billion a year there) , charges commercial rates for taxi and bus licences and introduces CBT charges for vehicles entering the city during peak hours, the cost of subsidising MRT may be manageable. Govt should leave it to the private sector partner to operate the LRT, but have a strong watchdog to monitor them.

Putting more and more cars on the road is certainly not a solution; it is a horrendous problem for which our children and grandchildren will curse us!

dpp
we are all of 1 race, the Human race

donplaypuks® 18 July 2010 at 00:39  
This comment has been removed by the author.
donplaypuks® 18 July 2010 at 00:41  

(part2)

I have NOT A SHADOW OF A DOUBT that an integrated taxi, bus and rail transport system will be the long-term solution to mass transport and people moving. It’s ridiculous to have a million or more cars (increasing every year) going in and out of KL, JB and Penang every morning and evening with the additional problems of pollution, accidents and petrol cost.

Therefore, the best solution is likely to be a public-private Joint Venture involving Govt and a large MNC and/or listed company. It cannot be done without Govt subsidising it. Not all the money has to be raised in one go as construction will take some 5 years and finance can be raised in stages as lines are made operational. Paying a few billion $ a year in interest and running costs year for 50 years is a better option than leaving it entirely to the private sector and then having to bail it out. Equally, I don’t trust Govt to build and operate it 100%!!

If Govt goes for open tender, takes over the AP’s 100% (there’s at least $2 billion a year there) , charges commercial rates for taxi and bus licences and introduces CBT charges for vehicles entering the city during peak hours, the cost of subsidising MRT may be manageable. Govt should leave it to the private sector partner to operate the LRT, but have a strong watchdog to monitor them.

Putting more and more cars on the road is certainly not a solution; it is a horrendous problem for which our children and grandchildren will curse us!

dpp
we are all of 1 race, the Human race

donplaypuks® 18 July 2010 at 00:41  
This comment has been removed by the author.
Anonymous,  18 July 2010 at 02:08  

RM43,000,000,000. A 10% profit is RM4,300,000,000 in the pocket. I cry for my country, it's bleeding profusely....

flyer168 18 July 2010 at 05:09  

Dato'

Another BLATANT Bolehland "Bankrupt the Nation" Exercise!

Just to share this...

History Of Mass Rapid Transit (MRT) And Light Rapid Transit (LRT) - http://www.sgwiki.com/wiki/Brief_History_On_Singapore%27s_MRT_And_LRT_System

"The 1960s was an era of great economic changes for Singapore. The city's leaders were convinced of the need to support the economy with a reliable and efficient transport system to support nation building.

To this end, the government commissioned a State and City Planning study in 1967 to study the possibility of expanding the transport network.

Amongst others, the findings of the four-year study pointed to a need for a rail transit system by 1992.

As a result, feasibility studies were carried out between 1972 and 1980 to examine the possibility of building a rail network supported by a network of buses.

The rail system was to operate through the most densely- populated areas and this resulted in the conception of the east-west and north-south lines.

To get on with work, a Provisional Mass Rapid Transit Authority was established in July 1980.

Anindependent team from Harvard University was engaged to reinforce the initial recommendations for a rail system supported by a bus network.

However, debate soon ensued as the team recommended that an all-bus network may be more feasible.

To shed some light into the matter, a Comprehensive Traffic Study was conducted in 1981.

Matters were soon back on track as the study confirmed that the rail system was crucial and an all-bus system would impose severe limitations on other road users.

1982 - The Work Began
In May 1982, the Government gave the go-ahead and work on the construction of the MRT began.

The S$5 billion project was targeted to be completed in 1992.

The 67 km-long route would boast 42 stations, of which 27 would be above ground and 15 under ground.

The north-south line was implemented first as more people need to be ferried across the busy Orchard corridor and the Central Business District.

On 14 October 1983, the MRT Corporation was established and took over the roles and responsibilities of the former Provisional Mass Rapid Transit Authority.

Thousands flocked to experience travelling on the MRT when its first section from Yio Chu Kang to Toa Payoh was opened on 7 November 1987.

Prime Minister, Mr Lee Kuan Yew¸ Then officiated the launching of the system on 12 March 1988.

The remainder of the system was opened in stages and the final section was completed in July 1990, two years ahead of schedule…” Unquote.

The Time Proven & Cost Effective Singapore MRT & LRT has been a good model to "LEARN" from just across the causeway...

Do the Powers that be & their sidekicks realise the scale of a "Proper & Correct Cost Effective" deliberations, etc as to how LKY & his Government achieved their success !

Just consider this, after "years" of "Transparent" Feasibility Studies, Debates, etc...

"The S$5 billion project was targeted to be completed in 1992...

Prime Minister, Mr Lee Kuan Yew¸ Then officiated the launching of the system on 12 March 1988.

...the final section was completed in July 1990, two years ahead of schedule…”

You be the judge.

Cheers.

Anonymous,  18 July 2010 at 05:46  

Malaysia led by the politically motivated malays is all about, 'you tolong saya, saya tolong awak'.'You help me and I help you'.
They are not interested in dealing with the brainy malays and only deal with the same kind as themselves because thats as far as they can think on economic terms. So at the end of the day all malays name get sold out just because of these stupid idiots.
I totally agree with you Dato Sak. Thats why I say you should go far,far far away from them and join the brainy malays to bring down this crooks from laundering the country. The problem with you Dato, you are also stuck with the thinking that through UMNO its easier to go up the ladder but you forget its tough to deal with crooks. You got to be a crook to join them. The proverb says, 'Set a thief to catch a thief'. Hahahah

schenker78 18 July 2010 at 08:17  

dato'

it seems singapore did study for abt 10 years till 1982 before start construction. But Malaysia can build it within 1 year of study or less.

that shows Malaysia Boleh.....
hmm

I hope as the MRT will run through 'Greater Kuala Lumpur', The Pakatan Rakyat Selangor Government will block all approval in terms of Land purchase etc. unless BN can do it in an open tender and transparent study of the project....

Anonymous,  18 July 2010 at 09:02  

Dato'

Mark our words...The Contract will be Fast Tracked to be signed before the next elections...

Lock em in before the new alternative government comes in for then claim damages if they want to rescind the contract...


Sooooo Predictable!!





Joe Black

Pak Zawi 18 July 2010 at 09:41  

Dato',
Agree fully with Joe Black. The idea is to scare the shit out of the next party who desires to be the next government with a 43 billion ringgit headache.

donplaypuks® 18 July 2010 at 18:58  

Bro

At the same time I don't think Walla's idea of bringing back the mini bus is a real or sensible option. I think Walla was just being facetious!

The main reasons the mini bus was outlawed are that they were operating as a law unto themselves. They had no regard for traffic rules and courtesies or bus stops and were themselves main contributories to traffic congestion and pollution in the city. The drivers were another horror story!

Just look at the tut-tut in Bangkok and its equivalents in Jakarta and Chenai? Is this how we want our cities to look like in the 21st century and beyond or are we talking bullet trains and S'pore, Tokyo , Shenzen etc?

Mass transit and people moving by definition must include integrated taxi, bus (& double deckers), LRT/MRT and trains, and yes, trams as well. Anything (except SOV's, tut tuts & mini bus a la KL style) where the ratio of passengers:vehicle is 4:1 or greater.

Looking at absolute costs alone is silly. It's cost:benefit that's relevant. Otw, USA and Russian would have never set foot on the moon!

And it CANNOT be successfully done without Govt and private sector JV AND a certain amount of Govt subsidy! That's true for S'pore, London, New York, Paris, Tokyo, Munich etc.

dpp
we are all of 1 race, the Human Race

Anonymous,  18 July 2010 at 23:59  

Now we are sure to be a bankrupt country by 2019 or even sooner if this fcuking project is implemented. We do not have the monies, just cut the subsidy of food, sugar, cooking oil and gas from the poor and needy. Who going to benefit from this project , not the country , not the rakyat and we fcuking cannot afford this nonsense project. If it makes economic sense just tender to any company who is willing to built and run for 25 years and charge what ever price they deem fit. No guarantee from the gov, no bond guarantee and if there is a stupid company willingly to do it, the rakyat will tank you. I said DO NOT, again DO NOT fcuking get Tanah Melayu in more debt. Ass O.

Anonymous,  19 July 2010 at 12:26  

Sak, for once, like you, I wish we got the BEST at the cheapest or the most reasonable possible budget.
C'mon, do the right thing. This MRT system in Malaysia is historical and very important. I am sure our PM would want to go down in the Malaysian History as the one that created "History" providing it's rakyat with the " best transportation system." during his era.

Anonymous,  19 July 2010 at 13:05  

Knock, knock,

Quite Despair & Are You Gonna Go My Way. Engkau orang dimana ? Don'tlah cherry pick and join the debate when we talk about race issues only. Economic issues are more important. Pergilah beri nasihat kepada Najib. Afterall, you guys have lots to say previously. Kalau Najib tak dengar nasihat, appoint Ibrahim Ali as PM. All our problems mesti selesai. Guarantee.

lan 19 July 2010 at 18:12  

I hate Gamuda for what it is doing, reaping full money from we the people!

alan hiley 20 July 2010 at 19:19  

Bravo Gamuda..

They always win.

Ipoh to Padang Besar contract won at RM 12 billion - when earlier during Dr Mahathir's time they bid for the whole balance track Ipoh-Padang Besar AND Seremban-JB for RM 14.5 billion.

So got almost the full price for half the job.

Still wondering why they're cocksure?

Francis Yeoh (the brutal and ugly apek) is fuming coz Gamuda has infringed their proprietary business model - "buy people". And Gamuda is out-buying YTL. It's free-market economy.

Can't blame Gamuda.... their war chest is bursting with cash.

Just imagine if at the price RM14.5b can give 10% profit ie. RM1.45b, how much will RM12b give them for half the job? maybe some 40%-50% profit ie. RM 4.8b to 6b.

And LITRAK (LDP highway) is giving them 50% profit on turnover on a project with a capex, imagine the return on their SMART Highway a project with zero capex...!

Perhaps its not even that they really want new projects ...but the loot got to be distributed a little..(just crumbs , mind you!) so everytime they do their santa claus rounds, they keep being thrown at with new jobs.

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