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									Cross-Border Infrastructure: A Toolkit


                                                     Mass Transit:
                                         Comparison of Bangkok & Kuala Lumpur


                                                     Session on Private Sector Participation

                                                                             Yong Hee Kong
                                                   PPP Resource & Research Centre, Kuala Lumpur


                                         The views expressed here are those of the presenter and do not necessarily reflect the views or policies
                                          of the Asian Development Bank (ADB), or its Board of Directors, or the governments they represent.
                                                        KL: Historical Background
Cross-Border Infrastructure: A Toolkit



                                         • Study by JICA 1987
                                         • Appeared in Mid-Term Review of 6th Malaysia Plan
                                           (1994)
                                         • Appeared in subsequent Malaysia Plan. Lack of budget.
                                         • Started in early 1990s, completed in August 2003.
                                         • Government’s intention to create integrated rail transit
                                           network, part of multi-model urban transport system.
                                                   KL: Overview of Urban Rail Network
Cross-Border Infrastructure: A Toolkit



                                         • Four components:
                                             KTM   Komuter (157 km electrified double track system)
                                             LRT   1 and 2 (STAR and PUTRA)
                                             ERL   (to KLIA airport)
                                             KL   Monorail
Cross-Border Infrastructure: A Toolkit
                                         KL: Privatized Urban Rail Transit System
Cross-Border Infrastructure: A Toolkit   KL: Urban Rail Transit Network
                                                     KL: Benefits of Privatization
Cross-Border Infrastructure: A Toolkit



                                         • Reduced traffic congestion and time-saving.
                                         • Positive impact on urban environment.
                                         • Improved safety.
                                         • Relieved government’s admin and financial burden.
                                         • Promotion of economic growth.
                                         • Helped to meet social target.
                                                               KL: Issues
Cross-Border Infrastructure: A Toolkit



                                         • Reasons behind the need to privatize urban transit
                                           system (10 years in the making)

                                         • Reasons for negotiated bidding

                                         • Over-estimation of passenger figures
Cross-Border Infrastructure: A Toolkit
                                         KL: Negotiated Bidding
                                         KL: Over-Estimation of Passenger Figures
Cross-Border Infrastructure: A Toolkit
                                           KL: Need for Restructuring and Improvement
Cross-Border Infrastructure: A Toolkit



                                         • Both LRT (STAR and PUTRA) “nationalized” in
                                           September 2002
                                             SPNB - takeover assets & liabilities
                                             RAPID - takeover operations

                                         • Steering Committee (INSPAK) formed to push for
                                           integration of all transport systems in Klang Valley.
                                         • ERL and KL Monorail still struggling financially.
                                                           KL: Lessons Learnt
Cross-Border Infrastructure: A Toolkit



                                         • Over- estimation of ridership

                                         • Overall authority body - to ensure vertical integration
                                           of systems

                                         • Requires public sector subsidization to make fares
                                           affordable
                                                    Bangkok Mass Transit Schemes
Cross-Border Infrastructure: A Toolkit



                                         • Three separate schemes were initiated in the 1990’s
                                             Bangkok    Transit System (BTS or Skytrain)
                                             Hopewell   elevated rail project
                                             The   subway (20 km underground rail)
Cross-Border Infrastructure: A Toolkit
                                                           Bangkok Hopewell
Cross-Border Infrastructure: A Toolkit


                                         • Concession given to Hopewell Company

                                         • 60km multimodal transport system - elevated toll road,
                                           MRT, local road improvement and a port rail

                                         • Financial attractiveness from property development rights
                                           on SRT-owned land
                                         • Property boom collapse during 1997 financial crisis
                                         • 14% completed
                                         • Government terminated concession in 1998
                                                             Bangkok - Skytrain
Cross-Border Infrastructure: A Toolkit


                                         • Opened in late 1999 running on elevated heavy rail system
                                           above Bangkok commercial areas
                                         • 23 km and 23 stations, cost US 1.5 billion
                                         • Riderships below forecast
                                             1st   year, quarter of forecast
                                             current,   third of forecast
                                         • Fare box sufficient to cover operating and maintenance
                                           costs but not capex.
                                         • Financial problems, debt of more than BT40 billion
                                         • Restructuring plan not yet approved by creditors
                                         • Talks of government buying over the debts (and company)
                                                            Bangkok - Subway
Cross-Border Infrastructure: A Toolkit


                                         • Private operates (BMCL) on 25-year concession from Mass
                                           Transit Authority of Thailand. Public sector paid for
                                           construction, concessionaire paid for trains (80:20 funding).

                                         • Construction started November 1996, opened on August
                                           2004.

                                         • 20 km long with 18 stations and 3 interchange stations (to
                                           Skytrain).

                                         • Average ridership below expectation at 140 000 p/d.
                                                               Lessons Learnt
Cross-Border Infrastructure: A Toolkit


                                         • Low ridership - below forecast
                                             Holistic   approach required with vertical integration.
                                             High  initial capex - cost recovery result in relatively
                                              high fares compared to alternative transportation

                                         • Linking transport infrastructure development to profits
                                           of property development is an insecure basis for
                                           ordered progress (Hopewell).

                                         • MRT helps stimulate economic growth - e.g. rental
                                           rates of buildings gone up.

								
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