KUALA LUMPUR: Economists have offered mixed responses to the notable absence of provisions for High-Speed Rail (HSR) and Mass Rapid Transit (MRT) in the 2024 Budget.
Nusantara Academy for Strategic Research senior fellow Dr. Azmi Hassan said both HSR and MRT3 entail substantial expenses, and the costs are very high.
"If we look at the 2023 Budget, the former Prime Minister stated that the cost for MRT3 would be reviewed, and it was also not mentioned in the 12th Malaysia Plan (12MP).
"We have to remember that these are pricey megaprojects. So, I think, for Malaysia, it is a very prudent decision taken by the government," he told Business Times.
Asked whether these megaprojects will be shelved, Azmi opined that both HSR and MRT3 will most likely be shelved because looking at Indonesia, the first HSR in Southeast Asia by Indonesian President Joko Widodo is facing a huge burden of debt due to the high costs.
"They probably cannot recoup the expenses that have been incurred for the HSR in Indonesia. Therefore, I would advise against constructing both HSR and MRT3 simultaneously because it would be a burden for our government, especially at this point in time," he said.
Putra Business School economic analyst Associate Professor Dr. Ahmed Razman Abdul Latiff opined that both HSR and MRT3 were left out of the 2024 Budget because the government wants these two projects to be fully financed by private investors and therefore will not involve government funding.
However, he emphasised that the government will not shelve them but would rather wait for any interested private investors to take up the project.
Sunway University economics professor Dr. Yeah Kim Leng said that given the current fiscal consolidation phase, the government is prudent not to embark on mega infrastructure projects such as the HSR.
"Nonetheless, the private sector is being encouraged to explore the viability of such high-impact projects through private sector financing and public-private partnerships.
"All in all, it comes down to a question of affordability, fiscal prudence, sustainability, and timing, where ideally the project helps boost the economy as part of the government's counter-cyclical spending," he noted.
Under the 2024 Budget, Prime Minister Datuk Seri Anwar Ibrahim announced that the government had agreed to resume the construction proposal of five Light Rail Transit Line 3 (LRT3) stations that were previously canceled, namely Tropicana, Raja Muda, Temasya, Bukit Raja and Bandar Botanik.
He said the retention of these stations is expected to enhance and improve the public transportation network in the Klang Valley, benefiting approximately 2 million residents, with a cost of RM4.7 billion.
Anwar also said the initial estimate for the Penang LRT to Seberang Perai, as planned by the state government, is RM10 billion through a public-private partnership (PPP) approach.
The Prime Minister, however, made no mention of the development of HSR and MRT3 in the budget.