Malaysia’s MRT Corp has tapped rail veteran Dato Ir. Zohari Sulaiman to oversee the third. MRT line project, its first to be implemented without a project delivery partner (PDP).
Zohari, a seasoned industry man with over 36 years’ worth of experience, has been appointed project director for the MRT Circle Line, also known as MRT3. He departs from Prasarana Malaysia subsidiary Rapid Rail Sdn Bhd, where he was chief executive officer.
Interestingly, Zohari’s move marks an upstream shift of sorts as Rapid Rail is the operator of the first MRT line, the Sungai Buloh-Kajang route, which began operations in July 2017.
A mechanical engineer by training, Zohari began his rail career with Keretapi Tanah Melayu Bhd (KTMB) and subsequently joined Sistem Transit Aliran Ringan Sdn Bhd (STAR-LRT), which went on to operate Malaysia’s first LRT system. At STAR-LRT, Zohari oversaw operations and engineering training.
In Prasarana, he was former group director and chief executive officer of Rapid Bus Sdn Bhd. Formed in 2013, Rapid Bus operates Prasarana’s bus operations following its consolidation of various bus service providers in the Klang Valley.
Zohari was also head of Prasarana Rail and Infrastructure Projects Sdn Bhd, which developed Prasarana’s Bus Rapid Transit (BRT) service and LRT line extensions for the Ampang/Sri Petaling and Kelana Jaya lines.
With his lengthy experience in the industry, Zohari takes the hot seat at the MRT3 project amid scrutiny from both political and non-political observers. The execution of the first two MRT lines leveraged on the expertise of PDPs and MRT3 marks the first time MRT Corp needs in-house know-how to ensure successful delivery.
Shift to Turnkey Approach
To recap, the MRT3 project is structured around a turnkey contractor approach which will assume responsibility for the financing in addition to the project execution. But while it marked a shift in approach for MRT Corp, it is not a new model.
Railway operators worldwide has adopted the turnkey approach since the late 1980s, based on the idea that a single consortium comprising various component suppliers will take responsibility for the design, construction, financing and sometimes even the operation of the system.
In Malaysia, the shift attracted criticism as critics worry the hefty financing requirement may close the door for local consortiums to vie for the turnkey role. MRT Corp told Singaporean newspaper The Straits Times that it is keen to attract overseas bidders.
According to MRT’s tender notice issued in November, prospective bidders must have a financing proposal of at least 30 years with eight years moratorium. The margin of financing must not be less than 90% of the total expected project cost. The tender closed on Dec 29.
Later that same month, MRT Corp told business newspaper The Edge that financing cost is a critical factor in the decision, as foreign parties may be able to offer interest rates below 4% whereas turning to local lenders may cost above 5%.
It is not new for Malaysia. For example, Japan’s Official Development Assistance yen loan scheme has helped Malaysia launch a number of high impact projects previously, the government has said.
Among recent examples for other railway projects in the region that adopted a similar model is the Jakarta MRT, which is currently under construction with a targeted completion of 2019 for the first phase. It is funded by the Japan Bank for International Cooperation.
Elsewhere in Asean, Vietnamese city of Hanoi is expecting two metro lines to complete over the coming few years via the same model of foreign financing. The 13km Cat Linh-Ha Dong line is funded by a Chinese consortium while the 19.7km Ben Thanh-Suoi Tien line is funded by a Japanese-led consortium.
Spotlight On Delivery
Given the scrutiny on MRT3 and much discussion over the implications of possible foreign financing, the delivery of the project — led by Zohari — will be under the spotlight.
His extensive experience with various rail systems will be an advantage. It is notable that Zohari’s railway career included time with KTMB, a railway operator with history dating back to colonial times.
In addition, his experience with the LRT system as well as the feeder bus network providing complementary connectivity to Prasarana’s rail lines will provide invaluable perspective in ensuring MRT3 is holistically designed.
According to MRT Corp chief executive officer, Dato’ Sri Shahril Mokhtar, Zohari’s vast knowledge will be an advantage for the project as MRT Corp expands without a PDP entity, which means in-house expertise is needed for the direct supervision of the project.
“His extensive background in rolling stock engineering, maintenance, refurbishment, technical safety as well as his experience in the heavy rail and light rail operations would be vital as the MRT network further expands in Klang Valley,” Shahril said.