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Malaysia’s Daim Zainuddin puts the China-backed East Coast Rail Link back on track (Source: Handout).

Financial management in Singapore is worrying

by Brad Bowyer

So, Malaysia and China are going to build 648k of a rail link connecting Port Klang across the country and up the east coast to Kota Bahru. It’s an important part of the Belt and Road Initiative and will cots RM44 Billion (SGD$14.4B) after a budget renegotiation.

By contrast, the Singapore Malaysia High-speed rail link is still on hold with no budget renegotiation yet in sight. Also, the HRS was only going to need 350Km of rail link but with a budget of SGD$16.8B (RM$51B) with an allowed possible 20% overage to RM$60B, it was budgeted at almost 2.5 times the longer line per kilometre.

Aside from why can’t we renegotiate the budget and not lose this important link with a major trading partner and a part of the Belt and Road program why is the cost 250% more expensive?

Who is doing the budgets these days?

This is a serious question because when we look at purely domestic projects, we also see the same issue arising.

Our 35.5km circle line with 30 stations cost around $8B to build and now the government wants $4.85B to add just 4km of track and 3 stations to close the loop. How can it be 500% more expensive?

Our Downtown line budget ballooned from $12B to $20.7B a 72.5% overage in just 5 years as did the MCE which went from $2.5B to $4.3B and another 72% overage in a similar time frame.

And then we get to Changi Airport. The entire airport, T1, T2, T3, T4 plus Jewel cost only $7.36B in total over the years so how can terminal 5 alone cost 10’s of Billions and they can’t even give us a number?

Are they going to build it out of gold?

I am going to do a separate article on Changi but how can we continue to accept these budgeting failures and cost overruns?

In a private business if I was the CFO and came to the board saying its going to cost 10’s of billions, I am not sure exactly how much so can’t do a real cost-benefit analysis but it feels like a good idea I would be fired very quickly, especially with a track record like the one above.

What is going on with our money management? These are our hard-earned tax dollars and there seems to be a very laissez-faire attitude towards spending them.

I don’t know about you but I am very worried about our financial management.

This was first published on Brad Bowyer’s Facebook page and reproduced with permission.