Thursday, November 5, 2009

Double-tracking project the next PKFZ?

By Asrul Hadi Abdullah Sani

KUALA LUMPUR, Nov 5 — With former Transport Minister Datuk Seri Chan Kong Choy implicated in the Port Klang Free Trade (PKFZ) scandal yesterday, will the RM6 billion double-tracking project be the next?

The Public Accounts Committee yesterday recommended that Chan and former Port Klang Authority (PKA) general manager Datin Paduka O.C. Phang to be investigated for criminal breach of trust in the PKFZ scandal.

According to the report by PriceWaterhouseCoopers (PwC), it said the project outlay of RM4.947 billion will go up to RM7.453 billion due to interest payments and PKA must restructure the loan or it will balloon to RM12.453 billion by 2051.

But PAC also recently announced that it was planning to investigate the RM6 billion double-tracking project, after recent revelations that the project has been managed poorly, resulting in losses amounting to more than RM1 billion so far.

According to this year’s audit report, the government may have to bear part of the RM1.14 billion loss in the 179km double-tracking rail contract between Rawang and Ipoh as the project was poorly managed.

But Chan told the PAC that the double-tracking project is “three times the size” of PKFZ.

“No, it is not the biggest (project under the Ministry of Transport). Double-tracking project is much bigger. It is 12 almost 13 billion? It is three times the size of this project (PKFZ).

“We are talking only the northern, the southern part is almost four billion,” he said in his testimony to PAC on PKFZ.

The Rawang to Ipoh (southern) double-tracking and electrification project was completed in 2008 while the Ipoh to Padang Besar portion was proposed in 2002 as a continuation of the existing tracks.

In 2003, former Prime Minister Tun Abdullah Ahmad Badawi announced that the government had decided to postpone the project which drew heavy criticism from his predecessor Tun Dr Mahathir Mohamad.

However, the project was revived when then Deputy Prime Minister Datuk Seri Najib Razak announced that the Cabinet Committee on Public Transport had decided to revive the shelved northern section double-tracking project in 2007.

Dr Mahathir had said the cancellation was a wastage of public funds.

"When the double-tracking and electrification of the railway from Johor Baru to Padang Besar was proposed the lowest proposal cost RM14 billion and would take six years to build. Roughly the government would need RM2 billion a year for the project. It could be started in 2004.

“But upon taking over the Datuk Seri Abdullah Ahmad Badawi government decided to postpone it for some reason or other, although Abdullah had promised the former prime minister to go ahead with the project.

“Now the government has found that there is a need to go ahead. Unfortunately the cost has gone up. To build the double tracks and electrification of the portion from Ipoh to Padang Besar alone would cost RM12 billion, an increase of roughly 50 per cent or roughly RM7 billion if the line from Johor Baru to Padang Besar is to be constructed (as it must)," he wrote in his blog on June 24, 2008.

The project was awarded to Gamuda Berhad and MMC Corporation Berhad.

The major stakeholders of Gamuda and MMC are Raja Datuk Seri Eleena Sultan Azlan Shah and Tan Sri Syed Mokhtar Al-Bukhary respectively.

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