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SPEECH BY
YB Tuan Lim Guan Eng, Minister of Finance Malaysia

Launch of Public Transport Fund

2 May 2019, Aloft Kuala Lumpur Sentral


 

YBhg Datuk Zaiton Mohd Hassan,
Chairman of Bank Pembangunan Malaysia Bhd.,

YBhg Encik Arshad Mohamed Ismail,
President and Group Chief Executive Officer of Bank Pembangunan Malaysia Bhd,

Senior management and officers from respective ministries, agencies, private sectors

Distinguished Guests

Members of the Media

1. Good afternoon and Salam Harapan. First of all, I would like to thank Bank Pembangunan Malaysia for inviting me to the launch of the RM500 million Public Transport Fund, which we hope will help encourage increased public transport adoption by improving the infrastructure and connectivity further.

2. Improving public transportation across Malaysia is an initiative that greatly benefits a large number of Malaysians, across various income levels and age groups. As we are all aware, transport is the next biggest expense item after housing and many Malaysian households own more than one car, some due to necessity as the high cost of housing near the city centre has pushed many lower-income groups to neighbourhoods with limited connectivity from public transport. Many are forced to buy at least a small car or a motorcycle to get to work, which adds pressure to their weak finances.

3. It should come to no surprise to us that, according to a Nielsen survey in 2014, 93% of Malaysian households owned at least one car, which ranks Malaysian households the third highest globally. Meanwhile, the modal share for public transport for Kuala Lumpur, our capital city with the most developed public transportation infrastructure, stands at around 20%, compared to 36% in Jakarta, 30% in Bangkok, and 67% in Singapore . A 2015 World Bank report also showed that transport costs are 50% higher in Kuala Lumpur compared to Hong Kong and Tokyo.

4. Therefore, it is imperative for us to make our public transportation network a truly viable and attractive option for commuters, not only in Kuala Lumpur, but across all our major cities. The Government has embarked on initiatives towards achieving this goal, such as the introduction of the MY100 monthly card for unlimited trips on MRT, LRT, and Rapid KL for RM100 a month, and MY50 card for unlimited trips on Rapid KL buses for RM50 a month. For 2019, the Federal Government has allocated RM240 million to subsidise commuters’ travel when they use the My100 and My50 cards. These initiatives have been warmly received, with 87,348 My100 subscribers as of March 2019. The construction of the LRT3 and MRT2 rail lines will further serve to increase connectivity in our capital city in the coming decade.

5. That being said, the Government is also aware of the need to be financially prudent in carrying out these projects based on realistic projections and the best terms to ensure the best benefit for the rakyat. After a period of renegotiation, the Pakatan Harapan Government has successfully reduced the project cost of LRT3 by RM15.02 Billion (47%) to RM16.63 Billion, MRT2 by RM5.22 Billion (23%) to RM17.42 Billion (for aboveground works), and the ECRL by RM21.5 Billion (32.8%) to RM44 Billion.

Ladies and gentlemen,

6. Malaysia is committed to the United Nations Sustainable Development Goals (SDGs) which are an urgent global call for action to end poverty, spur economic growth, while tackling climate change. In particular, Goal 11 calls for making cities more inclusive, safe, resilient and sustainable. This is made necessary due to rapid urbanisation, which exerts pressure on air quality, living environment and public health. Reforming urban transportation can serve as a strong catalyst for achieving that Sustainable Development Goal.

7. It is estimated that Malaysia’s urbanisation rate will reach a peak of 80% by 2020. The rapid rate of urbanisation poses a challenge to ensuring all segments of the society enjoy greater liveability and quality of life, and that growth is sustainable for the cities. Road transportation accounts for about 85% of all transport-related CO2 emissions in Malaysia. Of that, the largest share of 59% comes from cars and 11% comes from motorcycles. It is clear that in the next decade or two, the largest improvements in transportation sustainability can be made from a modal shift away from personal cars and motorcycles to buses and commuter rail services.

8. According to the World Bank, urban transportation seems to be the weakest component of Malaysia’s national transport system, with millions of Rakyat affected by daily road congestion. It is estimated that residents of Greater Kuala Lumpur spend more than 250 million hours a year stuck in traffic, or about 20 days a year per person. By comparison, both our intercity and rural transport are performing better, especially the country’s impressive intercity transportation, which is attested to by Malaysia’s high rankings in global logistics indices. However, there remains a need to improve transportation to lingering pockets of disconnectivity, primarily in Sabah and Sarawak and some parts of Peninsular Malaysia.

9. As part of the Government’s initiative to enhance and improve the existing public transportation system in Malaysia including the infrastructure and services, we have introduced a new Public Transport Fund to be managed by Bank Pembangunan Malaysia. Through this Fund, we hope to increase the number of rakyat using public transport by financing the system’s improvement. The funding may be used to purchase vehicles like taxi, bus or other types of public transport vehicles, and can be utilised by the operators, suppliers, manufacturers, assemblers of public transport vehicles and contractors, as well as developers of these infrastructure. In addition, a 2% financing rate subsidy will be given to the successful applicants.

10. This reflects the Government’s ‘entrepreneurial state’ mission, where the government will support and provide incentives to strategic sectors such as public transportation. These sectors may not necessarily be commercially attractive for the ordinary investor, but have potential to trigger an exponential multiplier effect to our growing economy, and improving people’s quality of life. Through initiatives such as today’s Transportation Fund, or the previously launched Digital Industry Fund, and Sustainable Development Fund, also facilitated through Bank Pembangunan, the Government hopes to catalyse the participation and collaboration of the private sector in these strategic areas in a mature and transparent way. This represents the current Government’s commitment to promoting a truly genuine private-public partnership or PPP 2.0 based on the principles of Competent, Accountable, and Transparent (CAT) administration.

11. The role of the public transportation has greatly evolved in this digital era. We should take advantage of the modern technological tools such as big data and the sharing economy to help tackle the missing links, like the first mile and last mile elements of the transportation system. Digital solutions may also be used to make the transport system flow more smoothly, resulting in less crowded trains that are punctual. Utilising digital technology can also ease the process of daily commute by providing passengers with real-time updates on traffic conditions and service interruptions, live estimation on their journey time, and giving them connectivity with WiFi access throughout the journey.

Ladies and gentlemen,

12. I hope those in the industry or are keen to be involved will take advantage of this opportunity through the Public Transportation Fund to make our public transport system better and contribute towards building a more prosperous and inclusive nation.

Thank you.

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