The Transport Minister said MRT Corp’s incurred losses were due to the high capital expenditure costs to construct both MRT 1 (Kajang line) and MRT 2 (Putrajaya line), as well as low ticket rates and the ongoing subsidised My50 unlimited travel pass.
The heavy financial “losses” of Mass Rapid Transit (MRT) Corp Sdn Bhd reflects its true purpose in supporting long-term socio-economic growth for the country and people, says Anthony Loke.
The Transport Minister told a press conference at Parliament on Wednesday (July 10) that MRT Corp’s incurred losses were due to the high capital expenditure costs to construct both MRT 1 (Kajang line) and MRT 2 (Putrajaya line), as well as low ticket rates and the ongoing subsidised My50 unlimited travel pass.
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NewsTranscript
00:00On the issue of MRT Corp, in terms of finance, it has been answered by the Ministry of Finance.
00:08But I want to emphasize that what needs to be looked at is the accumulated balance or the debt that has been accumulated
00:16is due to the rather high capex spending.
00:20It is known that to build a MRT line, it requires tens of billions of funds from the government.
00:29And indeed, what the government has invested to build the MRT line
00:34is not easy for us to recover in a short period of time.
00:38But the construction of infrastructure and public transport
00:43is beneficial to the country and the people over a long period of time.
00:49It is not only in terms of financial performance.
00:53But the construction of infrastructure such as MRT and LRT is to build economic growth,
01:00urban growth, and also to ensure good connectivity between one place to another
01:10and also to facilitate the movement of the people.
01:13In terms of finance, it is quite difficult for the government to recover what has been spent.
01:20Because our capital is quite low.
01:24Because we use quite low capital.
01:28Now, on top of that, we also provide subsidies for the purchase of monthly pass, only RM50.
01:35And the government is forced to spend RM200 million a year to implement that initiative.
01:42So I hope that many people, including MPs,
01:47will see that the context in the headlines in this country needs to be looked at from various angles.
01:54And not just to say that we cannot be sustainable.
01:58Indeed, the government knows that any investment in the construction capital
02:04will take a long time for us to recover and to improve over a long period of time.
02:10But in terms of ridership, in terms of the use of public transport,
02:15especially the MRT,
02:17I would like to explain what has been reported in the headlines in the country.
02:22They have taken a few examples that are perhaps not quite accurate in terms of the context.
02:30Because what has been reported, among them, is that the usage is only 10% of the target.
02:37That was in 2021.
02:392021 is the era of the COVID pandemic.
02:44And at that time, there was a continuous lockdown for months.
02:49So many people could not move.
02:51Of course, when there is a lockdown, the usage of MRT 1 and MRT 2, and all public transport,
02:57of course, will decrease.
02:59So we look at this graph.
03:01If we look at this graph, in 2019,
03:04the average daily usage for MRT 1 has reached RM205,000 for MRT Kajang Lai.
03:10But it has decreased in 2020 and 2021 to only RM61,000 on average per day.
03:17But after COVID passed, the average usage has increased again.
03:23In 2022, the average usage was RM139,000.
03:27In 2023, the average usage was RM204,000.
03:30And at this time, this year, the average usage is almost RM240,000 per day.
03:37So we see that compared to last year, this year has seen an increase of 18%.
03:43So if we estimate, by 2026,
03:48the usage or ridership for MRT 1 will increase and will reach almost 300,000 people per day for the usage of MRT 1.
04:00For MRT 2, MRT 2 must also be seen from the context.
04:04Because in 2022, MRT 2 has not been fully opened.
04:10It was only opened for the first phase, from Kwaza Damansara to Kampung Batu.
04:19It was only in 10 stations and did not reach Putrajaya.
04:23The opening of MRT 2 was only completed until Putrajaya Central in April.
04:32In March 2023.
04:35So in 2023, we have seen that the average usage is RM93,000 compared to RM23,000 in 2022.
04:45And for this year, it has increased to RM140,000 per day for the usage of MRT 2.
04:53So we expect that this increase will continue for the coming years.
04:59So we have to look at the context that the usage for MRT 1 and MRT 2 has increased.
05:08Although it has not reached the desired target, but the trend continues to increase.
05:23Indeed, that is one of the provisions that has been proposed.
05:26But given the current situation, the government has not yet desired to look back at the mining condition.
05:32This mining condition has been around for quite a long time, more than 10 years.
05:36It has never been raised, it has never been re-examined.
05:40So given the current situation that we see, there is indeed a pressure from the cost of living,
05:46the government will continue to increase the usage of public transportation.
05:49So there is no need to worry.
05:52MRT buses and MRT trains will be maintained for the time being.
05:57And we continue to raise the price.
05:59In addition, we are not only not raising the price, but we are also providing quite good incentives.
06:04So MYPAS 50 will continue.
06:08So we hope that the people, especially the residents of Lembah Kelang, will use the MYPAS this month.
06:16And we hope that more people will use the MYPAS this month.
06:20We will be better, because when the usage increases,
06:26then in terms of the average cost, there will be a reduction for the government.
06:31So we hope that more people in Lembah Kelang, especially, will use public transportation,
06:37especially our MRT and also buses.
06:41And we hope that this can also help to reduce the inconvenience.
06:45So we know that the inconvenience of public transportation is one of the major problems in Lembah Kelang.
06:51That's why I was late this morning and caused me to be disturbed in answering questions.
06:57So I am also a victim. I don't use an Outrider. I don't even have an Outrider.
07:03So the Minister and the Minister of Education are also like ordinary people.
07:07And I understand that the inconvenience in Kuala Lumpur is quite severe now.
07:13And indeed, we have discussed various measures to reduce the inconvenience of public transportation.
07:20But I admit that it has not been successful yet.
07:24But we will continue, such as increasing the number of bus stops, increasing the number of buses,
07:30improving our public transportation system,
07:34so that we can encourage more people to use public transportation.
07:40An industry expert has questioned the AGS classification of MRTs as lacking in financial stability,
07:47saying that the finding does not reflect the true nature and purpose of the company's existence.
07:53So do you see if there is any mismanagement of funds?
07:58I don't foresee what does it mean by mismanagement.
08:02Because what has been accumulated is the cost of construction.
08:07Of course, if we look at it from the perspective of sustainability,
08:10from the perspective of operation, it cannot be reimbursed.
08:14But what we have to remember is that the MRT is a government project.
08:18So a government project, when there is an off-balance sheet,
08:22it is guaranteed by the government. There is a government guarantee.
08:26So it does not mean that the MRT Corp cannot repay the debt.
08:30It does not exist. Because the MRT Corp is a GLC, a government-related company.
08:36And the debt in terms of construction costs is guaranteed by the government.
08:42It is paid by the Ministry of Finance so that there is continuous repayment.
08:48So it does not mean that it is not sustainable.