RTS Link Project Costs Rise by 29.9% to RM5.24 Billion: Auditor-General’s Report
The estimated cost of the Rapid Transit System Link (RTS Link) infrastructure project has surged by 29.9%, reaching RM5.24 billion as of December 31, 2023. This increase, up from the original estimate of RM4.03 billion in January 2018, highlights several key factors driving the escalation in expenses.
Reasons for Cost Increase
According to the 2024 Auditor-General’s report, the cost increase can be attributed to several significant factors:
- Expansion of Depot Work Scope: The depot’s scope expanded from light to heavy maintenance.
- New Contracts: Implementation of a traffic diversion scheme and construction of the customs, immigration, and quarantine (CIQ) complex.
- Supplementary Infrastructure Work: Iconic facades, aesthetic flyover structures, and additional land acquisition costs.
- Parking Facilities and Piling Costs: Extra infrastructure costs for the construction of parking facilities and additional piling at the CIQ complex.
These enhancements and additional requirements have substantially contributed to the overall cost increase of the RTS Link project.
Financial Implications
The report underscores that while the government’s allocation of funds for the Klang Valley Mass Rapid Transit project and RTS Link project had been utilized for approved public infrastructure projects, the rise in project costs could impact the government’s current financial position.
Project Overview
The RTS Link is a 4km cross-border rapid transit system connecting Malaysia with Singapore. It includes two stations: Bukit Chagar in Johor Bahru and Woodlands North in Singapore. The project aims to facilitate smoother and more efficient travel between the two countries, reducing congestion and improving connectivity.
Impact of the Covid-19 Pandemic
According to Mass Rapid Transit Corporation Sdn Bhd (MRT Corp), the project developer and asset owner, the cost increase was unavoidable due to several factors:
- Rising Raw Material Prices: The Covid-19 pandemic led to a global surge in raw material prices.
- Changes in Work Scope: Adjustments to ensure a holistic traffic solution and increased land acquisition costs also played a role.
Government Financing
On July 24, 2020, the government agreed to finance the RTS Link project through the development expenditure allocation via the transport ministry. Clause 10.1 of the project development and management agreement stipulates that the government shall finance the development of the RTS Link infrastructure according to the revised estimated project cost of RM5.24 billion.
As of December 31, 2023, the transport ministry had disbursed RM1.94 billion, or 37.1% of the total approved allocation, to Malaysia Rapid Transit System Sdn Bhd (MRTS), a subsidiary of MRT Corp. Of this, RM1.55 billion (29.6%) was spent on payments to contractors and consultants.
Conclusion
The RTS Link project represents a significant infrastructure development aimed at enhancing connectivity between Malaysia and Singapore. Despite the cost increase, the project continues to progress, with substantial investments already made. The rise in project costs underscores the challenges of large-scale infrastructure projects, especially in the face of global economic shifts and unforeseen circumstances like the Covid-19 pandemic.
