BIG TICKET INFRA PROJECTS THAT HAVE BEEN EITHER AXED OR SHELVED
There was plenty of trepidation in the lead up to Budget 2019, which was tabled on Nov 2. In weeks prior, the language from the government seemed cautionary, lowering our expectations for a closet full of candies as we braced for harsh austerity measures.
As it turned out, it wasn’t quite the apocalypse we expected, nor was it Christmas-come-early. Instead Budget 2019 turned out to be a mixed bag of goods that can be best summed as “something for everyone, but not a lot for anyone”.
On the upside, it showed a measure of discipline and responsibility that has been conspicuously absent in recent years.
However, we always knew some costly ongoing initiatives would be facing the guillotine, so here’s the round-up:
- The RM15 billion Multi-Product Pipeline and Trans-Sabah Pipeline projects have been cancelled.
- RM81 billion East Coast Rail Link (ECRL) pending renegotiation of the cost is suspended pending renegotiation.
- The RM60 billion MRT3 project is on hold
- The RM110 billion Kuala Lumpur-Singapore High-Speed Rail is on hold.
The good news, say Finance Minister Lim Guan Eng, is the revised costing for the LRT3 and MRT2 projects will translate into savings of 47% or RM16.6 billion and 22.4% or RM30.5 billion (respectively).
Also, the Klang Valley Double-Tracking 2 Project, which was terminated by the previous government, will be re-tendered via an open tender exercise for a smaller cost. Various government agencies are re-negotiating contracts amounting to RM19 billion entered into by the previous government via direct negotiations or limited tenders.
Savings of at least 10% of construction cost or RM1.9 billion are expected from this move.
Lim said tens of billions of ringgit saved from the rail projects will benefit passengers in the form of lower ticket prices to encourage higher use of public transport and lower the utilisation of private vehicles. This, in turn, reduces the stress on the country’s road infrastructure.
The Federal government also intends to reduce its overall stake in non-strategic companies and utilise these proceeds to pare down debt.