“RM110 billion” HSR?

By : Anti Wayang

When our Finance Minister Lim Guan Eng said he had received offers to do the Singapore-Malaysia High Speed Rail at half the cost, that got me thinking.

Firstly, the Singapore and Malaysian government had always estimated the cost of the HSR at between RM50b to RM70b but suddenly, Guan Eng insisted that the actual cost is RM110b.

When Guan Eng was questioned by Najib, where he got the RM110b number from, Guan Eng said it was because it includes interest costs and accuses Najib of hiding the true cost. https://www.themalaysianinsight.com/s/51358

Folks may not know but the HSR project is a joint-project by the Malaysia and Singapore government.

The tender for HSR opened at the beginning of the year and was supposed to close in June 29 but got extended before GE14 to the end of the year.

This tender was for to build, operate and FINANCE the trains and the rail assets and is to be JOINTLY evaluated by both the Malaysian and Singapore governments and both would JOINTLY make a decision. It is just not Malaysia alone.
https://www.straitstimes.com/singapore/malaysia-singapore-call-for-joint-tender-for-kl-singapore-high-speed-rail-asset-company

So then, my question is this: How did Guan Eng know what will be the actual cost of the project and what are the financing costs since the tender had not closed and the bidders for the project is supposed to also contain the financing packages?

Does Guan Eng know that for HSR projects such as this where national pride of the bidding nations are concerned, the bidders are very aggressive when giving financing?

Japan gave India a 50 year loan at 0.1% interest rate for their US$17 billion (RM70 billion) high speed project awarded in 2016.
https://indianexpress.com/article/india/bullet-train-loan-rate-0-1-free-in-a-way-pm-narendra-modi-shinzo-abe-japan-india-4844198/

In a Indonesia High Speed rail project, China offered a financing package of 2% over 40 years while Japan offered a 0.1% ip.a interest rate package.
https://qz.com/480910/china-and-japan-are-vying-to-build-indonesias-first-high-speed-rail/

So, if the tender has not closed, the price not determined and the financing packages will most likely have ultra-low interest rates,, how did our Finance Minister claim that a project that is estimated to cost between RM50b-70b by BOTH govts, which will likely have ultra-low interest cost will end up costing RM110b?

And now Guan Eng says there are private company that is trying to short-cut the joint international open tender by offering to build the HSR at half the RM110b (which comes back to the original cost of RM55b).

Therefore, who can you blame is people now suspect that this deliberate doubling of the cost to RM110b and then halving it again back to the original figure is an attempt to bad-mouth the previous BN Govt and then award the project to selected cronys who now prefers to deal direct?

(Artikel ini merupakan pandangan peribadi penulis dan tidak semestinya mencerminkan pendirian TTKM.  – Editor TTKM ) 

 

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