Thread by @khalidkarim

This thread is about Guan Eng's negotiations on LRT3 and MRT2 elevated section.

MRT2 LRT3
Length km 38.5 37
Contract RM 17.42B 10B
Cost/km RM 452 mil 270 mil

Are the direct nego fair prices?

The first question is of cos the huge difference between MRT2 and LRT3 cost?What are the possible reasons?

1)Less and smaller stations?
2)Shorter platforms?
3)Less trains?
4)Lower quality finishes?
5)Slimmer trains thus smaller and ligher viaducts?

Any other reasons?

Accounting for the above differences...wud probably explain a few billion difference in cost.But wud still leave at least RM100M/km "unknowns".

Next...let's compare with the cost of the elevated section of MRT1;

Cost RM bil 12.2
Length km 41.5
Cost/km RM 295
Cost/km MRT1 RM 452
Difference 56%

MRT2 elevated section is 56% higher than MRT1...WHY?

That's a huge cost difference for essentially the same workscope...
RM6B left on the table by Guan Eng.

So what cud be the reasons?

Inflation based on 3.5% per annum wud account for RM2B.
PDP fees at 18% wud be about RM2.7B(big profit here).
Is the balance PROFITS?

Based on my assumptions/calculations~the contract is still a highly profitable one.With the PDP profits added in~it's still a mid double digit profit margins.Small contractors will hv orgasms if can get 8% profits lah.

And bear in mind~I am basing the numbers on MRT1 contract cost~which is not exactly one with slim margins.
To get a feel of the potential profits...compare a project in Taiwan~28km Metro with about 50% underground cost RM470m/km compared to MRT2 all elevated at RM453m/km.
GILA.

Guan Eng thinks the Works Pkg for 52.2 km of MRT2 shud cost RM28B.Let's compare with some other MRT projects
Jakarta Taiwan
% underground 46% 45%
Cost/km RMmil 464 470
Equivalent for
MRT2 RM Bil 24B 25B

MRT2 with only 26% underground shud cost less than the two MRTs ie Taiwan and Jakarta with the 45% underground.

Underground cost double to three times of an elevated section.

Using cost/km for Jkt and Taiwan...MRT2 shud cost at most RM24B.And possibly lower at RM20B.

Too much.

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