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| 1. | The cost of PORR at RM10.2b has been found to be very high compared to other similar highways eg. North-South Highway, Jelutong Expressway etc. Why ?
AP: PORR is a double carriageway highway of 1.7km. This is cost is Rm1020 000 000/17x2 =Rm30m/km/lane. Jelutong Expressway of 4.5km is a 4-carriageway highway. Thus its cost is Rm300 000 000/4.5x4=Rm15m/km/lane. The cost for building PORR is double that of Jelutong Expressway. This is an erroneous figure. Based on latest estimates, PORR will cost RM 1.02 billion, not RM10.2 billion. The Federal Government will pay RM150 million for land acquisition for the project, which leaves about RM870 million in construction costs. This means PORR will cost about RM51 million per kilometre for a two-lane dual carriageway with a three-metre hard shoulder on both sides of the road. The cost of JEway is RM310 million for 4.8 km length of highway. After subtracting land acquisition, squatter relocation cost and reclamation, its construction cost is about RM278 million or RM58 million per kilometre. Unlike PORR, JEway is a three-lane dual carriageway highway (total 6 lanes), constructed along a flat surface.
PORR’s cost is inevitably higher because a large portion of the expressway will be built on difficult and undulating terrain with variable soil structure along Penang Island’s hills. Twelve kilometres of PORR is elevated, of which six kilometres is double-decked. Land reclamation for PORR also involves deeper coastal waters compared to JEway. In comparison, Singapore is constructing the 12-kilometre Kallang/Paya Lebar Expressway, which is set to cost S$1.8 billion (approximately RM4 billion or RM333 million/km) because of its costly underground tunnels, nine kilometres in length. To reduce construction cost and fund maintenance, tolling will be imposed on PORR when completed. However, the rates will be kept to a minimum through exchange of State Government land with the concessionaires.
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| 2. | The costs above would be paid for through giving the concessionaire 30 acres of prime State Lands, the right to reclaim 500 acres of sea off Gurney Drive, and allowing toll collection of 30 years. It has been calculated that these items would value at about RM5b much higher than the project cost. If the State Government is willing to give such good terms to the concessionaire it is a wonder why it need to privatise the projects in the first place.
Government land is not given to the concessionaire but will only be exchanged. From the 76 acres previously agreed, only 65 acres will be exchanged presently. The estimated value of land to be exchanged is between RM180 million and RM200 million. The exchange of Government land meant to subsidise the construction cost initially and minimise the toll rates later. Reclamation of 130 acres off Persiaran Gurney and 370 acres off the Jelutong Coast for development is also to subsidise cost. Only RM150 million is directly financed by the Government (this figure is for land acquisition only, on the reasoning that the PORR will be Government land leased to the concessionaire). The bulk of the construction cost of the highway has to be borne by the concessionaire. Toll collection is not only intended to cover construction costs of the highway but the yearly maintenance of it as well, especially for safety of users. It will be based on a ‘users pay’ principle, and motorist who are not comfortable with using the tolled expressway, can always opt to use local roads. A one-way trip from Tanjung Tokong to Penang Bridge is set to cost RM 2.
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| 3. | The cost of PORR has reportedly escalated while the project has been progressively scaled down. Why? The costs had reportedly inflated through going up the planning stages.
The cost of PORR has remained the same at RM1.02 billion (including RM870 million for construction and RM150 million for land acquisition). While the project has been scaled down since inception, its original alignment has also been shifted several times to reduce environmental and social impact, balancing out the price difference. While construction cost due to double decking may have increased, it has drastically reduced the need for hill cutting. The deletion of four kilometres of expressway is not enough to significantly reduce costs incurred in elevating the road structure. The construction cost of RM870 million is one agreed upon between the Malaysian Highway Authority and the Economic Planning Unit, after audits were carried out.
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| 4. | The cost offer by the Peninsular Metroworks should be compared with other contractors to find out the market rate for such a project.
AP: Some experienced civil engineers estimated that the current cost is enough to build 3 PORR. The Malaysian Highway Authority has audited the viability and feasibility of the PORR project. The construction cost of RM870 million is one agreed upon between the MHA and the Economic Planning Unit, following audits. Furthermore, the project will be evaluated using a financial model, which will examine costs and profit related to details, including land reclamation and development, design and construction, tolling and maintenance. As a major infrastructure project on Penang Island, great lengths will be taken to ensure it is carried out with integrity.
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| 5. | Such high cost to build PORR is enough to finance other better solutions to Penang’s traffic ills eg public transport solutions. Why not? Apparently the alleged reason for the politicians not to proceed with any major public transport initiative is that they are afraid of the political costs in alienating the majority car owners-but how is this fear compare with the fear they hold for the UMNO leadership should they don’t give mega road building projects to the crony companies?
Far from politics, the construction of PORR is motivated by necessity and a responsibility towards managing the State’s transportation system. It was first identified in the Japan International Cooperation Agency study in 1980, and later incorporated into the Penang Island Structural Plan. Road construction offers the most immediate relief to motorists, and will relieve local roads of congestion while public transportation solutions take shape. PORR will work with JEway to form an open loop around George Town, allowing effective channelling of traffic to and from the urban centres. PORR will complement public transport
Concurrently, bus integration is being undertaken and “Park and Ride” facilities are being examined. A monorail proposal is also being finalized for George Town. For more details of Penang’s sustainable integrated transportation solution, please visit Penang On the Move.
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