Lingering doubts remain over LRT budget

Saturday, June 25, 2011
Issue 1341, Page 3
Word count: 848
Published in: Macau Daily Times

By Poyi (Natalie) Leung

Lawmakers Au Kam San and José Pereira Coutinho expect that the newest MOP 11 billion budget for phase one of the light rapid transit (LRT) would not be the “ultimate figure”, and believe that the costs will likely far exceed this estimate.

However on the contrary, another lawmaker Ho Ion Sang was optimistic that the MOP 11 billion estimate is “relatively precise” as “many of the projects and contracts have already been finalised”.

Secretary for Transport and Public Works Lau Si Io and the Transportation Infrastructure Office (GIT) presented the updated budget of the first phase of the LRT to the Land and Public Concession Affairs Committee at the Legislative Assembly on Thursday.

Au Kam San, who sits on the committee, told the Macau Daily Times yesterday that the officials were unable to answer his question in the meeting about how much in total the government planned to spend on the LRT project.

“Except for the MOP 4.68 billion contract for the rolling stock and the system [that was already signed], detail design for the other parts of the project is still not yet completed. Therefore the government said it couldn’t confirm the final budget or wasn’t certain when it could be made available,” Au said.

“I can’t accept not having a precise budget”, he said, explaining that without it lawmakers would have a hard time to monitor government spending.

“The legislature already has no power to approve appropriation for public projects,” he pointed out.

GIT chief Lei Chan Tong told reporters on Thursday that construction costs of the two transportation interchange hubs in Taipa and Barra, which are expected to reach MOP 2.31 billion in total, are excluded from the MOP 11 billion estimate since the LRT will still be able to operate without them.

Au disagreed with the explanation. “On the contrary these two facilities wouldn’t need to be built if not because of the LRT.”

In addition, the lawmaker said two other interchange hubs will also be constructed at the Border Gate and Cotai, but the government has yet to disclose the budget.

“[The ultimate cost] definitely won’t be MOP 11 billion […] It’s possible that the final bill could be MOP 20 billion including the interchange facilities,” Au told the MDTimes.

José Pereira Coutinho shared this view. “I estimate that the current budget is far below the final cost.”

Explanation ‘unacceptable’

The newest budget represents a 46 percent surge from the previous 2009 estimates at MOP 7.5 billion. The GIT chief mainly attributed the significant discrepancy to inflation and Japanese yen appreciation, adding that in 2009 the LRT project was still in a “conceptual stage” and the budget was calculated based on a “rough estimate of costs”.

“In that sense, the making of budgets all over the world is meaningless,” Au argued, adding that the process is “not really a guessing game” and the figure has to contain “certain accuracy”.

Coutinho said he is also not convinced by the government’s justification. “The government deliberately lowered the previous estimates [MOP 4.2 billion in 2006 and MOP 7.5 billion in 2009] in order to obtain Macau people’s support,” he alleged.

He stressed that transparency is very crucial in the LRT project.

The information provided by the GIT on Thursday also revealed that the office spent nearly MOP 70 million in daily operating since it was established in 2008. Coutinho has also questioned the expenditure and requested an explanation.

On the other hand, Ho Ion Sang, who is also a member of the Land and Public Concession Affairs Committee, said he believed significant increases would not be seen in the budget in the future.

Yet, he pointed out that any changes should be explained and announced to the public and the legislature as soon as possible.

Ho also disclosed that the government has promised to set up an internal monitoring task force made up of key officials and experts to oversee the control of costs and the services rendered by the consulting firms.

“I hope the GIT will really improve its work in addition to accepting the opinions and suggestions in the report from the Audit Commission,” the lawmaker told the MDTimes.

He acknowledged that the construction budget of the Border Gate interchange hub is still not certain, and has also urged the government to disclose the figure as soon as possible.

The Audit Commission (CA) responded to the MDTimes’ enquiry yesterday that it would not give “separate comments” regarding the GIT’s performance apart from those in the report.

The spokeswoman said the CA may initiate the second phase of audit on GIT in the future and due to the “principles of confidentiality and fairness”, it could not comment on the newest LRT budget.

Early last month, a report from the CA criticised GIT for not being certain of what the total investment for the LRT would be.

“The lack of a global budget deeply hinders the global evaluation of the project’s financial needs. and could in fact lead to ‘out-of-control expenses’, thus increasing the risk of imbalance of the SAR Government’s financial operations,” the document said.

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