Tuesday, March 20, 2012

malaysiakini and Malaysian Insider Readers :"Can YOU Uncover RM1.6bil the BN Regime OVERPAID for Highways?"

A picture paints a thousand words but do you know I have uncovered RM1.6bil that the government appears to have overpaid for the highway projects in this study?
Mind you all these projects were all negotiated contracts that means that the "I help you, you help me" mantra applies?
I leave you to ponder how much is the amount above and beyond the values that is available in newspapers and online portals like the Malaysian Insider and malaysiakini. Studies elsewhere indicate that dubious practices like corruption will add 30% to 35% more to the overall costs of doing business. We have the MACC in Malaysia but so far there have been no major coups in nabbing corruption kingpins.

Back to this highway cost comparisons:
(click on the table to see the spreadsheet and it's best to open 2 windows)
Table 1 is based solely on the picture at the top, except that the latest highway, the EDL is also included.

Both AKLEH(2001 with 3 interchanges)and SHAMELIN(2012 with 3 interchanges) projects provide a good yard-stick as they are mostly elevated highways, with only 2.4% of SHAMELIN's highway being grade level.
If we analyse the cost per km of these 2 highways, the results are startling.

AKLEH's cost per km is RM95mil per km whereas SHAMELIN's cost per km is RM50mil per km and SHAMELIN is 11 years later than AKLEH.
Let us assume that SHAMELIN's cost per km is reasonable at RM50mil per km and let us also assume that the Grade section of highways is less than the elevated section. For this exercise, let us assume that the cost is RM30mil per km. I know some of you will kill for such a deal but let's how reasonable is that assumption.

Now examine Table 2.
I have used the unit costs for the Elevated and Graded Sections and mulitplied by the actual highway distances for the different highway projects. Any SPM student is capable of doing such an exercise.
The column of "ReCalculated Costs" shows how much the different projects should have cost using the RM50mil and RM30mil per km values.
We can then compare that with the actual costs and determine how much we have overcharged for our highways.
The figure in red indicates that we have overpaid RM1.6bil for these highways.
I wonder what the Works Minister has to say.

What is most shocking is that the EDL project costs appears to be 3 TIMES above the estimated cost.

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