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GEORGE TOWN: Penang should return to the drawing board after failing to secure a guarantee from the federal government for a RM2 billion loan to fund its first light rail transportation (LRT) project and to seek cheaper and more proven transportation systems, they say local activists.
Lim Mah Hui from Penang Forum said that given the current recession, the entire RM46 billion Penang Transport Master Plan (PTMP), which includes the LRT, roads and other transport systems, should be reviewed.
This comes after Putrajaya said it would not guarantee a $ 500 million (RM2 billion) loan offered by the Asian Development Bank (ADB) to the state, citing increased commitments. The Penang government, however, insists that it would go ahead even without the loan, considering other “financing options.”
Speaking to FMT, Lim said the situation could be a blessing in disguise as the LRT system was rapidly becoming obsolete with newer, cheaper and faster solutions such as the now available trackless trams.
“The state government should take another look at the cost of the PTMP. The LRT will become a white elephant when systems such as trackless trams or autonomous rail rapid transit (ART) become the norm.
“ART costs one-tenth the price of LRT and can be set up in one year. That should prevent the people of Penang from experiencing massive disruption during the construction of the LRT, which will take years, ”he said.
The ART, seen as a tram-bus hybrid, does not require elevated tracks or structures and is powered by regular rubber wheels. A set of three cars can carry 300 people, while five cars can carry 500 people, with a reduced turning radius of 15 m.
It has sensors that guide you through any set of roads and allows you to skip traffic lights as you will be given a right of way at intersections. According to Lim, Australian researchers have found that building an ART line would cost around RM 25 million per km and if a 20 km line were to be built it would cost around RM 500 million in total. He said that even if the costs rose to RM1 billion, it was much cheaper than Penang’s plan to build the 30-station, 19-km Bayan Lepas LRT, which costs around RM8.5 billion.
The Sarawak government plans to build its own ART system in Kuching, and testing is likely to begin in 2023 and full service two years later.
Economist Lim, who has worked with several international banks, including the ADB, said the countries borrowing from the ADB are “nothing out of the ordinary.”
However, he said that Penang would not be eligible for preferential tariffs that are generally given to poor countries.
“This is because Malaysia no longer falls under the category of poor countries. We are an upper middle income country. We will get a commercial rate, which will be more expensive than concessional loans, ”Lim said.
He said that while Penang could claim that it can repay the loans, state leaders must realize that their optimism was misplaced. LRT systems, he said, would naturally be companies at a loss, as could be seen in similar projects in the Klang Valley and other countries.
He said that even if the state took back the land and sold it to the highest bidder, there was no certainty that the reclaimed land could fetch the correct price. Based on these two factors, he said that taking such a large loan for the LRT project was very risky.
“The LRT is not going to generate cash flow but it will generate a deficit. How is Penang going to repay the loan? And why was this loan application not made public? “
Finance Minister Tengku Zafrul Aziz told parliament on Monday that the ADB had given the federal government three options in January.
It was a direct loan to Penang with guarantees from the federal government; a direct loan to the federal government with a new loan to Penang; or a direct loan to a special purpose vehicle with a guarantee from the federal government.
He also said that the repayment rate would be higher with a margin of up to 50 basis points.
