Cheaper to build

Penang Forum dissects the SRS financial report

SRS’ rebuttal that trams are more expensive to build based on the Sydney tram is disingenuous as the quoted costs includes land acquisition which is prohibitive given the price of real estate in Sydney. The CBD and SE light rail project spent $71 million (RM210m) acquiring just one building block in 2014. Australia as a more developed country also has much higher labour costs. The average salary for a construction worker in Sydney is $75,000 AUD, which is equal to RM18,375 per month or RM114 per hour! 

The average salary for a construction worker in Sydney is $75,000 AUD, which is equal to RM18,375 per month or RM114 per hour! 

More appropriate examples would be trams constructed in Kaohsiung, Taiwan, Casablanca, Morocco, Rio de Janeiro, Brazil and Suzhou, China, which are (with the exception of Taiwan) defined by the World Bank as Upper-Middle income countries. Kaohsiung is an interesting example given the similarities between Penang and Taiwan. The construction costs of modern trams in these cities ranges significantly from RM50 million per km in Rio de Janeiro to RM106 million in Suzhou, with the average cost being RM82 million. This is much lower than what SRS tell us, they are now quoting a cost of RM220m per km! 

Interviews with two of the largest tram manufacturers in the world led confirmed average construction costs including civil works, rolling stock and signalling plus communication systems range from Euro 18 -25 million (RM83 – RM115million) per kilometre. 

The SRS Consortium originally provided a cost estimate for tram of RM40 million per km. Yet, later did a somersault and inflated the tram construction costs to over RM220 million per km. One needs to seriously question the reliability of SRS’s statistics. If the cost of tram can escalate by over 450% overnight, how much will the LRT and the monorails really cost?

SRS quoted a benchmark figure of RM110m per km for BRT which is significantly higher than the Halcrow benchmark of RM25m for a grade separated track and RM7.5m per station. Looking at examples of recent BRT systems built around the world suggests a range of between RM40m and RM80m. The Centre of Excellence for Bus Rapid Transit  database of projects completed since 2010 suggests an average cost of RM30m per km, based on 61 projects around the world, with a range of between RM15m and RM275m per km.

So SRS are overestimating the cost of tram and BRT, but from our research, SRS benchmarks for LRT and monorail look like significant underestimates!

The long problematic Honolulu LRT in Hawaii, at 32 km is currently estimated at RM879m per km, however this is something of an outlier, but LRT projects in Manila (RM263m), Bangkok (RM247m) and Macau (RM266m) have all come in significantly above the SRS estimate of RM220m per km. 

The proposed Panama City monorail has a budget of RM396m per km, while the Sao Paulo monorail opened in 2014 at a cost of RM274m per km, and in the middle of this range we have the Dubai monorail which cost RM299m per km and the Las Vegas monorail at RM359m per km.

Is SRS’s estimates of RM170m per km for monorail overly optimistic? They have admitted their tram estimate was wrong! Perhaps they will do the same for LRT and monorail! SRS point to KL as their example. But we must remember that the KL Monorail project was initially estimated at RM840mil, but the final cost ballooned to RM1.169bnan increase of 40%!

SRS Benchmarks (2015)
Halcrow Benchmarks (2012)
Halcrow Benchmarks (2012)

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