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REVISITING MAHATHIR’S FLAWED TRANSPORT RECORD

By Kua Kia Soong, SUARAM Adviser 24 July 2017

Now that Dr Mahathir is the chairman of Pakatan Harapan, his former critics who are now his allies seem to be mouthing sweet nothings into his ears while ignorant sycophants are even calling him the ‘father of Malaysian public transport’!

Really? Concerned Malaysian historians need to start telling it like it is. Allow me to remind the country of the litany of woes we have suffered under Dr Mahathir especially the decades of traffic jams while fighting for a good public transport system in our country.

Malaysia is supposed to be on the final leg of the sprint toward attaining high-income status in 2020 only to be reminded by the World Bank (WB) that it is time for us to get serious about developing a more integrated urban transport system in our major cities. Today, Penang, Johor Baru and Kota Kinabalu are facing similar challenges as those in Kuala Lumpur, says the World Bank. Only 17% of commuters in Kuala Lumpur use public transport compared to 62% in Singapore and 89% in Hong Kong. Residents of Greater Kuala Lumpur spend more than 250 million hours a year stuck in traffic. The total cost of traffic in Greater Kuala Lumpur is estimated at 1.1 – 2.2% of GDP in 2014. (WB)

Failed opportunities

The quality of public transport continued to worsen as the non-accountable (non-elected) municipal councils and the property and motor industry barons had their day. More than enough taxpayers’ money had already been spent on endless studies of the transport problem. When the Japanese International Cooperation Agency (JICA) was contracted to undertake the Kuala Lumpur Transport Master Plan in 1997, it was the EIGHTH such study since 1963! (The Sun, 20.8.97)

“This study was clearly biased towards capital intensive road building projects. Policies toward encouraging the use of public transport and the restraining of private transport use during peak hours were noticeably absent.” (ibid)

Subsequent plans did call for a total transport plan including adequate public transport services but somehow, the political will was absent. In 1990, Japan’s Overseas Economic Cooperation Fund warned that Malaysia faced critical bottlenecks in its infrastructure if nothing was done to reform our transport system. (FEER, 5.4.90) By the mid-1990s, there was still no national transport policy in Malaysia.

As early as 1992, a Kuala Lumpur Transport Blueprint was drafted by an offshoot of KTM, Relk and a Canadian transport firm, Delcan. Its aim was to create an integrated bus-rail transport system for Kuala Lumpur by 1996. The plan involved harnessing an existing network of barely used railway tracks that criss-cross the inner city; foreign-designed rail cars and buses would be assembled in Malaysia and it would all cost a modest RM2 billion. The plan also involved including commercial outlets in the new rail stations that would produce profits to defray construction costs. (Doug Tsuruoka, FEER 29.10.92:68) Like the other plans, this blueprint never saw the light of day…

Structure Plans that got overridden

The first Kuala Lumpur (KL) Structure Plan was drafted in 1984 and intended for use until 2000. The strategy was to balance the development in KL through a moderate growth rate in the city centre and a rapid development of new growth centres Wangsa Maju, Bandar Tun Razak, Damansara and Bukit Jalil. (NST 11.3.2003)

As expected, instead of being followed, this first KL Structure Plan was “overtaken” by market developments and the new KL Structure Plan 2020 had to redefine the planning direction:

“The preparation of the Kuala Lumpur Structure Plan 2020 is undertaken in the conviction that most of the policies of the 1984 Kuala Lumpur Structure Plan (KLSP 1984) need to be revised due to unprecedented economic boom and rapid changes in the last 20 years. Some of the major developments that have taken place were not anticipated in the structure plan. Development such as the Multimedia Super Corridor (MSC), the Kuala Lumpur International Airport (KLIA) at Sepang and the transfer of federal government administrative functions to Putrajaya are anticipated to stimulate and influence future changes and growth.” (KL Structure Plan 2020, www.dbkl.gov.my/pskl2020/english/introduction/index.htm)

Bus service as chaotic as ever

In December 1993, the government’s vision of an efficient public transport system was launched through the mid-term review of the Sixth Malaysia Plan. It was announced that the bus companies in Kuala Lumpur would be merged in 1994 and a better bus service could be expected. When the Seventh Malaysia Plan was tabled the following year, the government announced that the bus services in the city would be operated by two consortiums, Intrakota Komposit Sdn Bhd and Park May Bhd. Intrakota took over the mini-bus services that had served Kuala Lumpur since the seventies and replaced them with new buses. Before long, the buses, drivers’ attitudes and the general bus service deteriorated. By end 2000, Intrakota had accumulated losses of RM339 million, partly the result of competition from other bus companies. (Nadeswaran, The Sun, 18.12.2001)

When the 21st century dawned, 13 bus companies in all were operating in the capital and the bus service was as chaotic as ever:

“At least two companies have sold their shares to politically well-connected individuals, whom they believe will be able to stave off any attempts to create the consortium.” (R. Nadeswaran & G. Shamala, The Sun, 16.12.2001)

On 29 November 2003, DRB-HICOM sold its Intrakota Komposit Sdn Bhd assets to state-owned Syarikat Prasarana Negara Bhd for RM177 million. Intrakota had suffered losses of RM450 million since the 1997/98 economic crisis from competition with the LRT systems, other bus services and unprofitable routes. (NST 8.12.2003)

Park May was a unit of the UEM-Renong group. Despite the backing of this conglomerate, it had been losing money since 1997. Among its problems were excess capacity, competition among the city bus operators and high maintenance cost. In late 2003, the leading express-bus operator Konsortium Transnational Bhd (KTB) took over debt-laden Park May.

 The National Car & Highways Projects

One of Mahathir’s earliest megaprojects, the national car was promoted at the expense of public transportation. The proportionately huge public development allocation for roads and highways paralleled the expenditure on the National Car Project.

 The number of registered vehicles in Kuala Lumpur more than doubled in seven years from 327,602 in 1985 to 662,717 in 1992. As a result, more than 150,000 man-hours were lost every day by motorists in the Klang Valley. Furthermore, the ratio of people using public transport compared to private vehicles had declined from 40:60 in 1980 to 30:70 in 1990. (NST 16.11.94) By 1998, there were 8.9 million motor vehicles on our roads of which 4.5 million were motorcycles, 3.5million were cars and the remainder being utility vehicles, trucks and buses. (1998 Environment Quality Report)

In recent years, residents in the Klang Valley have seen the rampant building of highways which have accompanied the national car project. In other environmentally conscious cities, there would have been protests over their indiscriminate construction with no heed for the environment, aesthetics or the peoples’ right to the commons and public footpaths.

A sustainable solution that ensures both the preservation of Malaysian nature and enables ease of mobility for majority of urban dwellers lies in creating an effective integrated public transport system, and not endless highways and tunnels for the driving pleasure of the middle and upper class. It is also time for Kuala Lumpur to emulate Singapore and London by limiting congestion by imposing entry charges for vehicles entering the city centre at peak hours, instead of dreaming up one populist measure after another.

The excuse most frequently heard for not implementing traffic restraining measures in the Klang valley is that there is no efficient public transport alternative. This is not convincing when we see that in other cities such as Singapore, Hong Kong and Tokyo, such policies were already in place before the completion of their mass transit systems. Public transport in the Klang Valley has been further undermined by high motorcycle ownership and use (an offshoot of the national car project) which has further contributed to the serious air pollution in the city. (Barter, A.R.P., 1997:9)

Failure of the Privatisation Policy

Dr Mahathir launched the privatization policy during the mid-eighties recession. The financial crisis was worsened by the fact that we had an over-developed public sector. This had come about because after 1971, the New Economic Policy had created more and more Bumiputera trustee enterprises and agencies. The public sector development expenditure for the Fourth Malaysia Plan (1981-85) was RM80 billion. Out of this, 34.5% was accounted for by the Non-Financial Public Enterprises, which were mainly Bumiputera trustee enterprises.

When I was Member of Parliament for Petaling Jaya from 1990 to 1995, I brought up many of these issues. Thus, the Government had certainly been forewarned about these problems. Many of the inside stories of the numerous contracts have been hidden from the public through the years involving corruption and the lack of accountability resulting in delays and inflated costs of these transport projects.

The failure of having a seamless integrated public transport system in the capital city is the result of UMNO’s obsession with its Bumiputeras-only patronage contracting and Prime Minister Mahathir Mohamed’s crony capitalism that would hand over these contracts only to the chosen Bumiputera trustees. Because of their lack of experience in these fields and the failure to secure bank financing, these projects were continually delayed. This in turn led to ever-increasing costs.

Failed Light Rail Systems

A Light Rail Transit (LRT) implementation study for Kuala Lumpur was first launched in 1984 by then Minister of Federal Territory Shahrir Abdul Samad. At the time, financing was a major question. The study was undertaken by a Belgian-French consortium. This LRT system was to be powered by overhead electric lines or catenaries and would cover 18 stations between Petaling Jaya and Sentul. The RM697 million project was targeted for completion in 1988. Unfortunately, the project did not take off. Along the way, the monorail was also proposed and was to have started in 1990. (Business Times, 18 December 1996).

The first phase of the Light Rail Transit (LRT) project comprising 12 km was privatized in December 1992, by which time its cost had increased five times the original estimate. It was awarded to Sistem Transit Aliran Ringan (STAR). The Renong group was given the franchise to undertake the second LRT project which was scheduled to be operational by the end of 1997 before the start of the Commonwealth Games in 1998.

In 2001, the government took over the light rail systems Putra and Star because they were having difficulties servicing their loans. At the time, the bus, LRT and KTM Komuter systems were not integrated at all and feeder buses at LRT stations were inadequate. The Commercial Vehicles Licencing Board had refused Putra’s application to operate a feeder bus service and the local authorities were not helpful in providing the necessary facilities for bus stops. (ibid)

When we look at STAR’s LRT project, how does a project that had failed for seven years to get any financing suddenly become “financeable” by EPF? STAR, after all, started as a 2-dollar company. STAR had claimed capital returns of as much as 18 per cent. But what penalty would it be liable should this not be possible? What assurances did EPF give Malaysian workers that this would not happen? Furthermore, as construction was not awarded under open tender, the private contractor could cream off a high proportion as construction profit, thus pushing up costs. To recover these high costs, fares had to be raised and we ended up with an LRT system that was not affordable even with government subsidies.

By the end of 1996, the first phase of the LRT was six months behind schedule because the mass transit system was facing some serious technical problems not easily corrected: “The delay could be a costly embarrassment, not just to the government but to the LRT’s British civil contractors – especially since Malaysia is also experiencing difficulties with fighter jets and frigates ordered from the British.” (Asiaweek 18. 10.1996)

Considering such staggering amounts of public subsidies, how can the government claim that privatization has saved the country millions in state revenue? Besides these soft loans from Government coffers, these private monopolies have also relied on Malaysian workers’ Employees Provident Fund (EPF) to finance their projects. Apart from the transport sector, EPF funds have been used to back such privatized projects as the Independent Power Producers (IPP) Segari power station at Lumut, the Kuala Lumpur International Airport, Bakun HEP, the Sewerage project as well as the Light Rail Transit (LRT).

But the ultimate subsidy that taxpayers provide these privatized industries is when we have to bail out ‘lame duck’ companies such as BMF, Perwaja, Ekran, UEM, MAS, the list goes on. Two LRT operators had to transfer the rail lines to the government-owned Syarikat Prasarana Negara Bhd in 2002, while the monorail was transferred in 2007. These operators had found themselves in financial distress after failing to make sufficient returns on the operations to finance their debts incurred in the construction and operational demands. (Star 26.6.2010)

Monorail too had to be bailed out

Kuala Lumpur City Hall first announced the monorail project in January 1990 after it had been approved by the cabinet in June 1989. The 14-km, 22-station system designed to carry more than 34,000 passengers a day through Kuala Lumpur’s commercial centre was estimated to cost RM143 million and was scheduled to begin in June 1990. This was then postponed to May 1991 because the city’s mayor complained that tenders submitted for the preparatory work were too high. The main contractor was a company, BNK, which had no experience in such urban transport projects and had reported a loss of RM224,660 in the year up to 31 March 1990. (Doug Tsuruoka, FEER, 26.9.91)

The RM1.18 billion KL Monorail project finally started in 1997. It was to be built by a consortium of Japanese companies including Hitachi Ltd and Toyo Engineering Corporation but the financial crisis of 1997 stalled it. Work only resumed in 2000 with financial assistance from the government, lending the company RM610 million in addition to RM300 million soft loan given in 1998.

KL Monorail Systems began operations in July 2002, providing an additional 8.6km of transit network stretching from Jalan Tun Razak to Jalan Tun Sambanthan near KL Sentral, interfacing with STAR-LRT at the Titiwangsa and Hang Tuah and Putra-LRT at Dang Wangi and KL Sentral stations.  Unfortunately, its huge elevated concrete infrastructure served to screen many of Kuala Lumpur’s oldest heritage sites such as the Guan Yin temple and the Chen ancestral temple.

Prasarana had to purchase the monorail after it faced bankruptcy in 2004 and gave operating rights to their subsidiary Rapid Rail Sdn Bhd. The light rail projects also faced problems when Putra defaulted on interest payments totaling RM44.6 million after its revenue could not cover its expences. (Business Times, 28.10.2000) The LRT operator STAR also faced closure when it accumulated debt of RM1 billion at the end of 2001. Its creditor Commerce International Merchant Bankers Berhad (CIMB) applied to wind up the company on 2 April 2002. (Star 3.4.2002) Rapid Rail Sdn Bhd was established to place all three rail operators – STAR, PUTRA and KL Monorail – under one administrative umbrella in 2004.

The KL Monorail was not able to meet even half its ridership target of 85,000 passengers a day by 2003 because it was not conveniently linked to the other two mass transit systems, Putra and Star. Passengers had to alight and walk considerable distances between systems to get to their destinations and feeder buses were not available at many stations. By 2005, Putra’s daily ridership was 170,000, Star’s was 100,000 compared to Singapore’s MRT achievement of two million passengers a day. (Malaysian Business, 16.5.2004:22) The planned Putrajaya monorail costing RM400 million to be built by MTRANS Holdings Sdn Bhd was shelfed in 2004.

Mahathir and the failure of Malaysia’s public transport

From the foregoing, it is clear that Mahathir failed to implement the necessary reforms for an integrated and efficient public transport system in the country because of his obsession with the national car project and privatisation. He does deserve the epithet ‘Father of neo-liberal capitalism in Malaysia’ after witnessing the spate of privatisation of our national assets and his promotion of crony capitalists in the country.

This is just to put the record straight. We must now ask, which political coalition can provide an efficient, affordable and sustainable public transport system in Malaysia and how can long-suffering Malaysian consumers be empowered in the process?  Such an important public service such as public transport system needs state support, regulation and intervention to operate efficiently and fairly; power must be devolved to regional transport authorities which then integrate all rail, bus and transit systems; certainly, local government must be elected by the people to ensure accountability and efficiency in the provision of public transport services, environmental protection and regulation of city traffic. Last but not least, Malaysian workers’ pension fund (EPF) should not be used by businessmen who have failed to obtain financing from banks.

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