Minister: Use of special purpose vehicle for Government projects is normal


KUALA LUMPUR: The setting up of a special purpose vehicle (SPV) to carry out Government projects is normal, said Minister in the Prime Minister’s Department Datuk Abdul Rahman Dahlan.

Referring to the SPV set up for the East Coast Rail Link (ECRL) project, Abdul Rahman said Malaysia Rail Link Sdn Bhd was fully owned by the Finance Ministry.

“Even with the Kuala Lumpur-Singapore High Speed Rail Project, it was the same,” he told a press conference at the Parliament lobby yesterday.

He said it was not necessary to get Parliament’s consent in forming the SPV, as claimed by several Opposition MPs.

Abdul Rahman also explained that the ECRL project, which will connect Port Klang to Gombak and Tumpat, was discussed at the National Economic Council and Cabinet.

The cost of RM55bil, he added, was not solely for the cost of building the railway track.

“In a green-field rail project of this nature, other costs such as engineering studies for design speed, topography, geological conditions will be required,” he said.

He also said the railway project would be owned, managed and operated by Malaysia.

Abdul Rahman also dismissed a local news report which claimed the ECRL was the most expensive rail project in the world, as every project had its own unique cost structure due to differing geographical conditions and infrastructure requirements.

“For example, the Bremmer rail project in Switzerland cost US$11.9bil (RM50bil) for a length of 57km, which means a cost per kilometre of US$209mil (RM880mil),” said Abdul Rahman.

“The ECRL will cost RM55bil for a length of 688km or RM80mil per kilometre.”

He added that due to Malaysia’s topology and optimum line alignment, the construction of the ECRL presented unique and complex challenges.

This included building multiple bridges with a total length of 110km and multiple tunnels a total length of 50km across the Titiwangsa range, he said.

“It is expected that this project will rank as among the most challenging engineering and construction projects in Malaysia to date,” said Abdul Rahman.

Construction for the ECRL project is expected to begin next year and will take seven years.

Almost 70% of the service will cater to the carrying of goods, while the remaining 30% will be for pass­engers.

The ridership for ECRL is expected to be 7.7 million by 2035.

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