Is There a MRT3 Business Model?

The PKR lawmaker, YB Chang Lih Kang (MP, Tanjong Malim) alleged that the financing entities and operator for rail projects, Prasarana Malaysia Berhad and DanaInfra Nasional Berhad, had breached their debt levels. The government loan guarantees for DanaInfra and Prasarana have breached RM110 billion and are expected to rise further with the MRT3 project, according to Chang. Both DanaInfra and Prasarana recorded debts at RM76 billion and RM38.9 billion respectively by June end 2021 Additionally, he claimed that the performance of the MRT1 project could provide a projection for the MRT2 and MRT3.

This is about 60.3 percent of total off-budget government committed guarantees. In early March, the Finance Ministry committed up to RM50 billion in financing for the MRT3 project. Chang alleged that similar to MRT1 and MRT2, the RM50 billion cost for MRT3 will likely be financed by a government loan guarantee under DanaInfra. DanaInfra’s debt will breach the RM126 billion with the implementation of the MRT3 project, which is approximately 40 percent of the country’s budget for 2022.

Chang claimed that if the ridership for the MRT2 and MRT3 projects did not match the government’s expectations, Prasarana would not be able to sustain itself. Tanjong Malim MP Chang Lih Kang Further, Chang claimed that the auditor-general had flagged DanaInfra in its 2018 report as one of the five companies that could not fully service loans accordingly.

Public transportation may not be highly Profitable but construction and operation of the rail

infrastructures must be funded by sustainable means. Is there massive TODs, or some other property development planned? The government must halt its implementation of the MRT3 project in order to allow more scrutiny over the project by the parliamentary select committees and independent financial and technical consultants to review.

Reference:

Citing debt, PKR MP questions MRT3 financial model, Alena Nadia, Malaysiakini, 16 May 2022