Ongoing mega projects risk delays on possible review

The stalling of the projects is having a tempering impact on the entire supply chain


ONGOING multibillion ringgit projects and several policies introduced by the Perikatan Nasional (PN) government could come under review and be delayed should a fresh government be installed.

The downfall of former Prime Minister Tan Sri Muhyiddin Yassin-led administration on Monday spells risks and uncertainties for mega infrastructure investments as the new government might want to touch base with the stakeholders involved in each of the projects.

Sunway University economist Prof Dr Yeah Kim Leng said it is typical for any new administration to relook at the progress and policies implemented by its predecessor.

But this time, he said the Covid19 crisis might add new challenges to the task for the new administration to make a decisive and prompt action.

He said any delay of mega projects would not benefit the economic cycle unless significant savings are made out of the deferment.

“Any approved projects should be sped up, not delayed. There are a couple of major projects that are still on hold, like the East Coast Rail Link (ECRL) partial alignment involving Selangor. This needs to be sorted out quickly and upon agreement, should resume accordingly,” Yeah told The Malaysian Reserve (TMR).

The economist said the stalling of the projects is having a tempering impact on the entire supply chain.

In contrast, mega projects could be a major push or support the government can provide to the economy.

Under almost 18-month of the PN-led administration, certain parts of the ECRL alignment progress and cabotage policy exemption for submarine cable repair vessels suffered a setback when the federal government reversed the decision made by the previous government.

The rail track rehabilitation project of Klang Valley Double Tracking Phase 2 (KVDT2) worth

RM4.475 billion involving contractor Dhaya Maju LTAT Sdn Bhd was suspended mid-way for retendering after former Transport Minister Datuk Seri Dr Wee Ka Siong sought to renegotiate the cost.

Below are some of the mega projects likely to come under scrutiny under a new administration.

ECRL Saga of Selangor Alignment

Launched by the Barisan Nasional administration in 2016, the railway line, spanning over 600km, has seen changes to its alignment twice.

The first change was made in 2019 when Pakatan Harapan (PH) took the helm, followed by PN in 2020.

PH managed to reduce the cost of the total project to RM44 billion from RM55 billion, mainly due to savings from a major track realignment of its Section C from Pahang to Klang, Selangor.

The tunnelling works in Bentong, Pahang, have been diverted for it to traverse from Mentakab to Klang through Negri Sembilan instead.

Wee proposed to reverse the idea but the PH-led state government in Selangor approved the plan and reiterated to stick with it.

KVDT2 Case in Court

Dhaya Maju LTAT Sdn Bhd had obtained an Erinford injunction by the Court of Appeal last month to restrain Keretapi Tanah Melayu Bhd from taking any further steps against the company’s licence to occupy and continue the project.

The contractor is seeking a declaration that the government’s decision to cancel the project and reopen the tender as invalid, null and void, besides claims for damages.

Former Prasarana Malaysia Bhd group CEO Muhammad Nizam Alias said capital investment projects such as KVDT, ECRL and mass rapid transit rail lines should be continued by the new government.

However, he said the government must ensure it can stretch the dollar and get the best value for money, such as through new funding models, especially for urban public transport operations.

“The current model, which relies heavily on debt and guaranteed by the government, is not a sustainable proposition.

“It also does not instil discipline on the operator nor provide enough incentives for them to become better and efficient,” he told TMR.

5G Rollout by December

The country’s RM11 billion 5G network is expected to begin by yearend and should not see any delay, the National Tech Association of Malaysia said.

Its research committee chairman Woon Tai Hai said, technically, any government-driven digital initiatives such as 5G, artificial intelligence and robotic process automation that are already in place should continue regardless of the government of the day.

“These technologies are essential and critical in keeping our economy competitive.

“5G rollout is a critical initiative that will change the landscape of the digital ecosystem, impacting the economy, productivity, lifestyle and enhanced connectivity. Hence, it cannot be delayed or deferred,” Woon told TMR.

Regardless, he said proper governance and relevant expertise must be incorporated in such longterm mega projects.

The PN government established Digital Nasional Bhd (DNB), a government-owned special purpose vehicle, to build and manage the 5G network across the country.

In July, DNB awarded Ericsson Malaysia contracts amounting to RM11 billion to kick off the project.

Critics raised questions on the sole vendor picked for such a huge investment.

Liberalising Cabotage Policy

The PN Cabinet was supposed to deliberate on cabotage policy and issues relating to submarine cable repair ships.

Earlier, Wee had revoked the cabotage exemption issued to foreign vessels involved in submarine cable repairs, causing concerns among tech giants Google LLC, Facebook Inc and Microsoft Corp and affected Malaysia’s attractiveness as an investment destination.

Under the PH administration, then Transport Minister Anthony Loke gave foreign vessels exemptions to enter and do submarine cable repairs.

He said this was due to limitations among local vessels in carrying out certain duties, but Wee and local shippers disagreed.

Subang Airport Privatisation

In May, TMR reported that the government was planning to carve out the entire Subang Airport ecosystem from its operator Malaysia Airports Holdings Bhd (MAHB), and consider a reconcession proposal submitted by WCT Holdings Bhd.

The proposal has been roundly criticised and objected to by industry players, airport unions as well as MAHB chairman Datuk Seri Dr Zambry Abd Kadir, who was appointed by the government to the airport operator’s board.

The Finance Ministry (MoF) had clarified there are no plans to sell any airport assets in Malaysia — including Subang Airport — to any party.

It said airport properties are considered strategic assets of the government.