Mass Transit: Comparison of Bangkok & Kuala Lumpur

Session: Private Sector Participation Topic 4.6. Mass Transit: Comparison of Bangkok & Kuala Lumpur Return to Grid of Topics

Session on Private Sector Participation

Yong Hee Kong PPP Resource & Research Centre, Kuala Lumpur 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 2003. • Government’s intention to create integrated rail transit network, part of multi-model urban transport system. Cross-Border Infrastructure: A Toolkit

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.

1 Session: Private Sector Participation Topic 4.6. Mass Transit: Comparison of Bangkok & Kuala Lumpur Return to Grid of Topics

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

2 Session: Private Sector Participation Topic 4.6. Mass Transit: Comparison of Bangkok & Kuala Lumpur Return to Grid of Topics

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

3 Session: Private Sector Participation Topic 4.6. Mass Transit: Comparison of Bangkok & Kuala Lumpur Return to Grid of Topics

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

4 Session: Private Sector Participation Topic 4.6. Mass Transit: Comparison of Bangkok & Kuala Lumpur Return to Grid of Topics

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

5 Session: Private Sector Participation Topic 4.6. Mass Transit: Comparison of Bangkok & Kuala Lumpur Return to Grid of Topics

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

6 Session: Private Sector Participation Topic 4.6. Mass Transit: Comparison of Bangkok & Kuala Lumpur Return to Grid of Topics 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

7 Session: Private Sector Participation Topic 4.6. Mass Transit: Comparison of Bangkok & Kuala Lumpur Return to Grid of Topics

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

Cross-Border Infrastructure: A Toolkit • Talks of government buying over the debts (and company)

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 2004.

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

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

8 Session: Private Sector Participation Topic 4.6. Mass Transit: Comparison of Bangkok & Kuala Lumpur Return to Grid of Topics

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. Cross-Border Infrastructure: A Toolkit