Signed, sealed and renegotiated
After winning the election, Pakatan immediately reviewed major plans. a few deals have been hammered out again at more affordable terms, enabling the government to save billions of ringgit, while others have been axed.
PAKATAN Harapan wasted no time in reviewing a few mega projects initiated during the Barisan Nasional era in hopes of saving the government billions of ringgit.
Tun Dr Mahathir Mohamad, on his second outing as Prime Minister, had said that government expenditure and debt had reached the tune of RM1 trillion or more than 65% of the gross domestic product.
His announcement at the first Cabinet meeting shortly after winning the 14th General Election was a shock, but analysts remained optimistic that certain projects would continue.
Economists also felt the decision to review the mega projects was a wise move as it was believed that some of the deals were opaque and valued far above market price.
Among those that came under scrutiny were the East Coast Railway Link (ECRL), the High Speed Rail (HSR), MRT3 and the Tun Razak Exchange (TRX).
Over the course of a year, Pakatan revived a few projects at more affordable terms, enabling them to recoup billions of ringgit in savings, while axing others.
Just by renegotiating the terms of building the ECRL, LRT3 and MRT2 alone, for instance, the government pocketed savings of more than RM46bil.
The renewed ECRL project saved the government about RM21.5bil, RM16.63bil was saved on LRT3, while another RM8.82bil was shaved off the MRT2 project.
The initial price tags of the three projects were RM66bil, RM31.65bil and RM39.35bil respectively.
These projects joined others that were spared the axe, including the Pan-Borneo Highway and the TRX development, which houses the Exchange 106 skyscraper.
Following negotiations with China, the government was also able to salvage Bandar Malaysia, a 196ha mixed-use project initially linked to 1Malaysia Development Bhd and had been stalled for two years.
Dr Mahathir said the project was revived given its impact to the economy.
While some infrastructure projects were revived, others like the Trans Sabah Gas Pipeline (TSGP) and the Melaka/Port Dickson-Jitra Multi-Product Pipeline (MPP) – both worth RM9.41bil – were stopped after it was discovered that 88% of the projects’ total value had been paid out but only 13% of the work was completed.
The MPP is a 600km multiproduct petroleum pipeline connecting Melaka and Port Dickson with Jitra costing RM5.35bil, while the TSGP is a 662km gas pipeline connecting the Kimanis Gas Terminal with Sandakan and Tawau costing RM4.06bil.
Another rail project, the MRT3 or the Circle Line, said to cost up to RM45bil was also canned as was the RM3.5bil National Immigration Control System.
The government is now reviewing other projects including two rail links – the HSR and the Rapid Transit System Link project (RTS) – which would connect Kuala Lumpur and Johor Baru to Singapore.
The HSR has been suspended until May next year, while the RTS was suspended for up to six months from April 1.