14 September 2016
Serdang MP Ong Kian Ming urged the government to secure a better deal for rail users when it negotiates the new concession agreement with the ERL operator. — File pic
The federal government must safeguard the interests of rail users when it signs the extension agreement with operator Express Rail Link Sdn Bhd (ERLSB) this month, Opposition lawmaker Ong Kian Ming urged today.
The Serdang MP pointed out that the Auditor-General had warned in its May report that the concession company had failed to get the “best value for money” when the rail project linking the Kuala Lumpur International Airport (KLIA) in Sepang to budget terminal klia2 was awarded.
“The new concession agreement must ensure that ticket price increases are reasonable and justified, that the methodology for projecting passenger and revenue growth is accurate and profits to the concessionaire must be capped at an agreed upon rate,” Ong said in a statement.
ERLSB is seeking to claim RM2.9 billion from the government in compensation for losses under the current deal, due to low ridership which was impacted by the delay of the extension’s use.
The losses, according to the A-G’ 2015 Federal audit report released in May, was based on a computation formula of compensation, which “does not benefit and protect the interest of the Government”.
The report revealed that the projected revenue for ERLSB set in the agreement was RM741.10 million in 2012, RM780.38 in 2013, and RM905.31 in 2014, with the company only reaching 11.5 per cent, 12.6 per cent and 13.7 per cent of the targets for the respective years, with the government having to compensate the losses.
Ong also urged the government to make public the existing agreement and the one to be signed this month.
“To ensure the public that the government as well as the consumer/user is getting a fair deal out of this new concession agreement, I call upon the government to disclose the concession agreement by publishing it on a government website and also for the Minister in charge of re-negotiating the concession agreement to explain the new agreement in a press conference,” he said.
The Federal audit report saw the A-G recommending for the government to conduct price negotiation to ensure best value for money and a supplemental concession agreement to be finalised promptly.
The report said that the supplemental concession agreement for the project had still not been finalised despite the fact the ERL services from KLIA to klia2 have been running since May 2, 2014.
The report noted however that the project increased the number of ERL passengers by 43.2 per cent from 6.44 million in 2013 to 9.23 million in 2014.
Original Source: www.themalaymailonline.com