DAP Petaling Jaya Utara parliamentarian Tony Pua warned that the government may be heading towards another financial disaster.

"The dramatic escalation of cost estimates for the Klang Valley MRT project before even the expected commencement of works in July this year is both shocking and scary.

NONE "It raises a big question mark as to whether the project can ever be completed on time, and within budget," warned Pua in a statement.

He cited The Star report yesterday, that the "MRT project cost is now estimated to reach RM50 billion".

"Now that the project has received the go-ahead, and the main project delivery partner (PDP) contract has been awarded despite the on-going public feedback process, it appears that the cost of the project is already beginning to see a significant increase," said Pua.

All this, despite Land Public Transport Commission (Spad) chief executive officer Mohd Nur Ismal Mohamad Kamal's assurances that the government was doing all it could to drive down the cost.

Mohd Nur Ismail was also unsure of the total cost with land acquisition and rolling stock, saying that it could come up to RM50bil.

"But it is too early to say... We will know the full picture later," said the CEO as reported in The Star .

No fixed budget

Pua argues that from what he can see, It is also clear from the Spad CEO's statement that there is no fixed budget for the project and the government is adamant on proceeding with the project regardless of the final bill.

"Will the government continue with the project even if the cost were to escalate to RM60 or RM70 billion?" he asked.

The major concern, he said, is that the government has not conducted a thorough cost-benefit analysis to determine the point where the direct and indirect costs may outweigh the direct and indirect benefits of the immediate implementation of the MRT project.

NONE Pua ( left ) also cited a study on major infrastructure projects around the world by Bent Flyvbjerg at Oxford University which found that rail projects not only suffered from cost overruns, but also lower actual passenger traffic.

The study warned that the main reason for the ugly set of statistics is that "planners and promoters purposely spin scenarios of success and gloss over the potential for failure".

It also argued that competition between projects and political pressures that creates an incentive for "project promoters to emphasise benefits and de-emphasise costs and risks".

‘Disclose PDP agreement'

He also called upon Spad to disclose the terms and conditions of the PDP contract with Gamuda-MMC, which it claims to "guarantee" against cost overruns.

This is especially since Gamuda-MMC is essentially acting like the main contractor to the MRT project. Spad must also disclose its detailed cost-benefits analysis of the MRT project for public scrutiny, checks and balances.

Given the high risks and costs involved with the project, Pua contends that greater transparency and public accountability is needed to prevent another disaster from happening.

"Particularly to prevent vested interest parties like the main contractors from taking both the government and the public for a ride," concluded the DAP national publicity director.

azlan