Friday, March 25, 2011

How to bandit Railway figures

With the recent completion of the contractors briefing held by Prasarana, opposition supporters were quick to pounce on the estimated amount of the cost of building of the new MRT line from Sungai Buluh to Kajang which was dissected and analysed by CIMB research.

The talk of the town is that the figures has ballooned (from RM36 billion when first mooted by MMC Gamuda to the current estimated RM53 billion) to facilitate 'undertable' monies and linked back to UMNO.

The email being circulated also compared the figure to China's Beijing-Shanghai line which required a mere US22 billion at the time of construction (mooted in 2007, the line took three years to build and is set to begin operations in June 2011)

What seems to justify the argument is that the Shanghai-Beijing line measures 1,318km vs the Sungai Buluh-Kajang line at 150km, as such the cost of construction for the Beijing Shanghai line should be higher than the Kajang-Sungai Buluh line.

At first glance, the email does makes sense, but here is what is NOT considered by these opposition bandits;

1. The land acquisition cost in the Sungai buluh Kajang line would definitely cost more vs the Beijing-Shanghai line, as it runs through cosmopolitan and urban areas vs farm land in China, and the acquisition of land for the China line was done prior to 2007.

2. The USD exchange rate differs sharply vs what it is today.

3. Transportation cost with the cost of oil per barrel is at least 30-40% higher currently vs the China construction period which took place between 2007 and 2010.

4. Skilled labour cost in China is at least 60% lower to what is available in Malaysia

The fact that there are many emails being circulated amongst opposition supporters that aims to instill that corruption and misuse of funds are the very fact why such impression are heaped on the country. However, it does not take a genius to carefully consider what is being bandit around because a curios mind will always be able to find out hard facts that are 'hidden' from the message.

If one considers carefully what it takes to develop a country, one will not find it hard to believe that Malaysia is indeed ranked as one of the top three choices of countries to live in this part of the world.

With a world class rail transportation system set in the offing, KL will bound to challenge for top honours.

This author asks the very relevant question that is this thought to be an apple vs an apple? Similarities to the APC argument that is the song and dance of Tony Pua vs MINDEF? - PJ Moorthy, Malaysia Instinct

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