Gemas-Johor Bahru Electrified Double-Tracking Project (G-JB)

Datuk Seri Mustapa Mohamad is on a train with Datuk Jana Santhiran Muniayan while visiting the Gemas-Johor Bahru Electrified Double-Tracking Project site - Photo from fotoBERNAMA

Gemas-Johor Bahru Electrified Double-Tracking Project (G-JB)

This research reflects information available up until December 2020, it may not reflect developments after the date of assessment.

The Gemas–Johor Bahru Electrified Double-Tracking Project (GJBEDTP) is a project to construct a double-track electric rail line from the town of Gemas in the state of Negeri Sembilan to the city of Johor Bahru in the state of Johor at the southern tip of Malaysia. It is the final component of the Malaysian Ministry of Transport’s broader electrified double-tracking project (EDTP); its completion will ensure a continuous double-track line across Malaysia from Padang Besar at the Thai border all the way to Johor Bahru, adjacent to Singapore.

The GJBEDTP aims to improve the quality of rail infrastructure, provide better train services to passengers, and improve rail safety for operations. It is slated to be the catalyst for economic and social sectors along its path. The project involves the upgrading and construction of a 192 km double-track electric rail line along with the construction of new passenger stations, rolling stock depots, yards, underpasses and bridges, the installation of signaling and communication systems, and the remodeling and renovation of 11 intermediate stations.

The project was first mooted in the early 2000s under the Mahathir administration but was only implemented in 2018. In June 2020, the government announced that 60 percent of the project had been completed; its estimated completion date is October 2022.

As of June 2020, the expected cost of the project was estimated to be around RM9.5 billion (US$2.26 billion), including RM400 million for coaches and staff quarters and RM200 million for consultation fees. This project is entirely funded by the federal government budget.

The ultimate owner of the Gemas–Johor Bahru rail track is the Railway Asset Corporation (RAC), a statutory body established under Article 89 of the Railways Act (1991) that owns and manages railway assets in Malaysia.

The contract for the project was awarded to the Chinese consortium of CRCC, CREC, and CCCC in 2016, three companies that together established the local vehicle CRCC-CREC-CCCC Consortium Sdn. Bhd. on March 24, 2016. CRCC holds a 40 percent stake in the consortium, while CREC and CCCC each own 30 percent. SIPP Railway Sdn Bhd and Syarikat Pembenaan Yeoh Tiong Lay Sdn Bhd are the main local subcontractors for the project.

Opaque procurement evaluations

There was a lack of transparency regarding the project’s opaque procurement evaluations. The Malaysian government had favored or even reserved the project to Chinese contractors to begin with, even though procurement was conducted through a competitive tender and open to foreign firms. Tendering regulations insist that the tender can be made open to local firms or foreign firms, but only if domestic firms do not have the capacity, expertise, or capabilities to undertake the proposed works. No records were made publicly available over the specific tender method, including tender specifications or tender documents from the tendering period. Although the tender process seemed to be open, reports also suggest that the subject of the contract’s award often came up during bilateral engagements between Malaysian and Chinese officials. Company media statements by CCCC mentions that the project award further strengthened the government’s relationship between China and Malaysia, enhanced the economic and trade cooperation between the two countries, and accelerated the development of the “Belt and Road” initiatives.

 

Lack of transparency regarding the feasibility study, impact assessments, contract details, and external auditing

Transparency is lacking regarding the project’s feasibility study, impacts assessments, contract details and external auditing. Key project documents such as the environmental impact assessment and the social impact assessment are not available to the public even though the project claims to bring environmental benefits arising from electric locomotives, which reduce the emission of pollutants and reduce fuel consumption. This makes it difficult to question the project’s credibility from a third-party point standpoint since there is no publicly available information on the project. In addition, the project’s benefits are questioned, as they remain limited due to the potential underutilization of the railway and structural challenges with the Malaysian rail network. Information regarding the acquisition of land was publicly available during the public display exercise; however, this transparency only lasted for the required three months. The records up for display are no longer publicly accessible. In addition to the preparatory reports, there is generally a lack of transparency on the contracting terms between the government and Chinese consortium, and a lack of transparency on the terms around the consortium and local subcontractor.

 

Cost Overruns and Project Delays

The project had one of the highest costs per kilometer of rail, thus increasing the risk of potential cost overruns compared to other double-tracking projects in Malaysia. In addition, the project faced delays regarding the land acquisition processes as squatters refused to move out, disputes with the state authorities, and the COVID-19 pandemic momentarily halted the project. These have resulted in a delay time for revisiting the construction plan and additional costs from the exercise. The project’s breaking ground ceremony was scheduled for December 2016, but was delayed due to issues with state authorities. The project completion deadline is now slated for October 2022. Opposition state members noted that cost overruns had occurred earlier in the project. The project cost continued to report a total of RM9.55 billion in total costs to the government as opposed to the RM8.9 billion stipulated in the contract. However, the clarification was that the estimated RM9.55 billion in total cost was a combination of the contract value, RM400 million for coaches, and RM200 million for consultation fees. Construction activities are still underway. Therefore, it remains to be seen whether the project delays or additional costs for the project will result in cost overruns.

Average Transparency Score:
1.89/6
  • Not Transparent
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Project & Contract Phase Project Information Score Response Link to Information
Project Identification Project owner Malaysian Ministry of Transport MOT Website: http://www.mot.gov.my/en/lands/rail-transport/plbegjb
Sector, subsector Transport; Railway MOT Website: http://www.mot.gov.my/en/lands/rail-transport/plbegjb
Project name Gemas-Johor Bahru Electrified Double-Tracking Project; Projek Landasan Berkembar Elektrik Gemas-Johor Bahru MOT Website: http://www.mot.gov.my/en/lands/rail-transport/plbegjb
Project Location begin in Gemas and will cover 4 main districts in Johor which are Segamat, Kluang, Kulai and Johor Bahru, ending at JB Sentral. MOT Website: http://www.mot.gov.my/en/lands/rail-transport/plbegjb
Purpose To improve the quality of rail infrastructure; provide a better quality, conducive, safe and passenger-friendly train service; and improve rail safety for operations. MOT Website: http://www.mot.gov.my/en/lands/rail-transport/plbegjb
Project description
Project Preparation Project Scope (main output) The project scope includes 197km of electrified double track, stations, electric trains depots, Land Viaduct, bridges, electrification and signaling systems. MoT Site Collection Documents: http://www.mot.gov.my/SiteCollectionDocuments/Darat/Gemas-JB%20bi.pdf
Environmental impact Not available
Land and settlement impact Relocation issues of residents on the pathway of the railway led to some delays: Through a Statement of Need (SON) Clause 1.8 issued by the Ministry of Transport on the Gemas-Johor Bahru Electrified Double-Tracking Project, RAC was given the responsibility to remove all obstructions (squatters) at the project site. A total of 1,306 squatter units of various categories were identified as obstructions to the project and had to be removed. Construction report on the project:
Contact details Postal address is: No. 26, Tun Hussein Road, Precinct 4, Federal Government Administrative Centre, 62100 Putrajaya, electronic address for the ministry of transport is [email protected] Ministry of transport site contact site: http://www.mot.gov.my/en/footer/contact-us
Funding sources The Malaysian public through the Federal Malaysian public coffers Construction report on the project:
ISEAS report: https://www.iseas.edu.sg/wp-content/uploads/2020/06/ISEAS_Perspective_2020_72.pdf
Project Budget •Total cost of MYR200 million for consultations, MYR400 million for coaches.
•Forecasts of approximate MYR120 million to MYR140 million in pretax profit per annum.
•From the 2016 budget of this project, USD24 million has been allocated initially to start construction of the project.
News sources are The Edge: https://www.theedgemarkets.com/article/gemasjb-rail-contract-sole-mega-rail-job-2019-says-cimb-research
Free Malaysia Today: https://www.freemalaysiatoday.com/category/nation/2020/06/21/no-increase-in-cost-of-rm9-55-bil-gemas-jb-double-track-rail-project/
Construction report on the project:
Project budget approval date Not available
Project Completion Project status (current) Ongoing; construction Construction report on the project:
Completion cost (projected) Installation of the Gemas-Johor Baharu Electrified Double-Tracking Project, starting next year, is expected to cost MYR7.13 billion. https://www.astroawani.com/berita-malaysia/china-consortiums-proposal-for-gemasjb-rail-line-being-evaluated-ministry-84871
Completion date (projected) • October 2021 was the projected date but the Coronavirus lockdown occurred and Malaysia went into a movement control order.
• Thus, the date of completion is October 2022.
Article from the New Strait Times: https://www.nst.com.my/news/nation/2020/06/602265/gemas-jb-double-tracking-project-be-completed-oct-2022-nsttv
Report from ISEAS: https://www.iseas.edu.sg/wp-content/uploads/2020/06/ISEAS_Perspective_2020_72.pdf
Scope at completion • Through the project, 22 train services should pass through daily.
• Designated train speed of 160km/h.
• There is a seating capacity of 346 passengers per train.
• This project will pass from Gemas towards Johor Bahru covering 11 stations.
Ministry of Transport Site: http://www.mot.gov.my/en/lands/rail-transport/plbegjb
Reasons for project changes •Changes in cost were due to the fact there was a change in government.
•There was a change in timing because of the occurrence of the Coronavirus, thus further delaying the project.
Article from Yusof Ishak institute: https://www.iseas.edu.sg/wp-content/uploads/2020/06/ISEAS_Perspective_2020_72.pdf
Reference to audit and evaluation reports Not available
Procurement Procuring entity •Ministry of Transport together with the consortium of three Chinese contractors
•China Communications Construction Co Ltd
•China Railway Construction Corporation Ltd
China Railway Engineering Corporation
Construction report on the project:
Procuring entity contact details •The address for the China Communications Construction company in Malaysia is: Level 10, Menara 1 Dutamas, Solaris Dutamas, No. 1 Jalan Dutamas 1, 50480 Kuala Lumpur, Malaysia. Their email address is [email protected]
•The address for the China Railway Construction Corporation is No. 40 Fuxing road, 100855, China and their email address is [email protected]
•The address of the China Railway Engineering Corporation is No.69, Fuxing Road, Haidian district 100039,China and their email address is [email protected]
Websites for the companies in question: http://www.cccc.com.my/contact-MY
http://www.crecg.com/english/2687/39952/index.html
Procurement process Contract was directly awarded with a percentage ownership breakdown of the Chinese Consortium is between CREC:CRCC:CCCC is 40:30:30. The Edge Markets news site: https://www.theedgemarkets.com/article/newsbreak-doubletracking-project-moving-again
Contract type Engineering, Procurement and Construction (EPC) Construction report on the project:
Contract status (current) Active Construction report on the project:
Number of firms tendering Not available
Cost estimate USD2100.00 million (No conclusive evidence has been found in regard to this topic)
Contract administration entity Not available
Contract title Not available
Contract firm(s) China Communications Construction Co Ltd, China Railway Construction Corporation Ltd, China Railway
Engineering Corporation, SIPP Rail Sdn Bhd and YTL Corporation Berhad
Construction report on the project:
Contract price MYR 8 Billion https://web.archive.org/web/20080618200528/http://www.btimes.com.my/Current_News/BTIMES/Monday/Latest/DHB.xml/Article/index_html
Contract scope of work The scope of the project will include the
design, construction, material supply, installation, completion, testing, trial operation and maintenance of the Gemas-Johor Bahru Electric Double-Track Railway.
Construction report on the project:
Contract start date and duration Not available
Implementation Variation to contract price Not available
Escalation of contract price Not available
Variation to contract duration Contract states project should be finished by 2020, however due to the Coronavirus outbreak, the date got postponed towards October 2022, with train services starting to run. Construction report on the project:
ISEAS report on project: https://www.iseas.edu.sg/wp-content/uploads/2020/06/ISEAS_Perspective_2020_72.pdf
Variation to contract scope Not available
Reasons for price changes Project is expected to cost MYR7.3 Billion https://www.astroawani.com/video-malaysia/projek-landasan-berkembar-gemas-johor-diteruskan-1702025
Reasons for scope & duration changes There were changes in the time duration due to the movement control order that was imposed by the government, thus delaying the project. ISEAS report on the project: https://www.iseas.edu.sg/wp-content/uploads/2020/06/ISEAS_Perspective_2020_72.pdf

Gemas-Johor Bahru Electrified Double Track Project