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.

Cross-Border Infrastructure: A Toolkit KL: Historical Background 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 Government’s intention to create integrated rail transit network, part of multi-model urban transport system.

Cross-Border Infrastructure: A Toolkit KL: Overview of Urban Rail Network 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

Cross-Border Infrastructure: A Toolkit KL: Benefits of Privatization 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.

Cross-Border Infrastructure: A Toolkit KL: Issues 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

Cross-Border Infrastructure: A Toolkit KL: Over-Estimation of Passenger Figures

Cross-Border Infrastructure: A Toolkit KL: Need for Restructuring and Improvement 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.

Cross-Border Infrastructure: A Toolkit KL: Lessons Learnt Over- estimation of ridership Overall authority body - to ensure vertical integration of systems Requires public sector subsidization to make fares affordable

Cross-Border Infrastructure: A Toolkit Bangkok Mass Transit Schemes 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 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

Cross-Border Infrastructure: A Toolkit Bangkok - Skytrain 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)

Cross-Border Infrastructure: A Toolkit Bangkok - Subway 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 km long with 18 stations and 3 interchange stations (to Skytrain). Average ridership below expectation at p/d.

Cross-Border Infrastructure: A Toolkit Lessons Learnt 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.