Chugging ahead with light rail investments-
As cities plagued with traffic congestion, high pollution levels, and soaring fuel prices explore alternatives for environmentally sustainable means of transportation, light rail is emerging as a viable option globally. Well-planned light rail systems can enhance the reputation, ambience, and competitiveness of any city, be it small, medium, or large. Policymakers and urban planners prefer light rail for a multitude of reasons including its lower cost compared to heavy rail.
Globally, there are about 400 light rail systems in operation. Europe has the highest density: about 170 systems in operation, over 60 systems under construction, and more than 100 systems planned. In North America, the Middle East, Africa, and Asia, new systems have been launched in the last decade, with more under way.
Four Southeast Asian cities – Bangkok, Kuala Lumpur, Manila, and Singapore – are operating light rail systems. These cities, with their major network expansion plans, as well as rolling stock and ticketing technology procurement plans, offer exciting business opportunities.
Southeast Asia Infrastructure presents a review of the existing light rail systems and upcoming investments in these cities…
Operational light rail systems
Bangkok SkyTrain: Gaining popularity and making progress
The Bangkok SkyTrain is Thailand’s first elevated electric railway system; it connects some of central Bangkok’s major business districts. Operated by the Bangkok Mass Transit System Public Company, it launched its service in December 1999. The network, including the core network and its subsequent extensions, comprises 32 stations across two separate lines with a combined track length of 33 km. A total of 177 cars supplied by Siemens and the China National Railway Locomotive and Rolling Stock Industry Corporation run on the system. Ridership has grown at a compound annual growth rate (CAGR) of 11.6 per cent since its inception. In 2012–13, the SkyTrain carried 197.2 million passengers.
Fares on the SkyTrain are collected through the new contactless Rabbit smart card that serves as the common ticketing system for Bangkok’s public transport systems. The stored-value card can be used at more than 20 retail outlets. Currently, the Rabbit cards are available for use on the BTS Sky Train, bus rapid transit system, eating outlets, coffee shops, fast food outlets, etc. In the future, the cards will also be used on the Bangkok mass rapid transit (MRT). Magnetic-stripe paper tickets are also available for single journeys and one-day passes.
The SkyTrain generates its revenues through farebox collections, as well as advertising and retail space management. In 2012–13, farebox collections constituted almost 57 per cent of BTSC’s revenues, followed by its media business that includes the Rabbit smart card (26 per cent), its property business (14 per cent), and advertising (0.4 per cent).
Kuala Lumpur rapid transit: Adopting a hub-and-network approach
Kuala Lumpur’s rapid transit system comprises two lines that span a total of 56 km across 49 stations. The 29 km Kelana Jaya Line (KJL) is the third longest, fully automated driverless line in the world, while the 27 km Ampang Line is driver operated. State-owned companies Syarikat Prasarana Negara Berhad (SPNB) and Rangkaian Pengangkutan Integrasi Deras SdnBhd (RapidKL) are the developer and operator of the system, respectively.
The current public transportation system in Kuala Lumpur consists of bus, light rail transit (LRT), monorail, express rail link, and commuter rail. RapidKL has adopted a network concept that integrates the LRT and bus services. It implements a hub-and-network approach whereby local pick-up shuttles carry passengers to the rail, LRT, or bus trunk lines. The latter then moves the passengers to city hubs where shuttles and rail then transport passengers to their final destinations.
The LRT system consists of over 338 railcars, mostly supplied by Bombardier. Fares on the LRT are collected through MyRapid, a contactless fare card. Several monthly passes and tokens are also available for transport on the LRT. Daily ridership stands at 420,000 passengers on average.
Manila LRT: Capacity constraints
Manila’s LRT that comprises two lines spanning 34.5 km, with a total of 31 stations, has been serving the city since 1984. The 20.7 km Line 1 (Yellow line), with 20 stations, connects Roosevelt Avenue to Baclaran. The 13.8 km Line 2 (Purple line), with 11 stations, connects Recto to Santolan.
The system is operated by the Light Rail Transit Authority, a government owned and controlled corporation under the Department of Transport and Communications (DOTC). The current fleet comprises 139 railcars supplied by Bombardier, Hyundai Rotem, Adtranz, and Nippon Sharyo. Average daily ridership stands at 670,000 passengers. An automated fare collection system, involving the use of magnetic-stripe tickets as the fare medium, has replaced the old token fare collection system operational on Line 1 up to 2001. The system that is integrated with the MRT is a key component of Manila’s public transport system. However, as the system contains only two lines, it has failed to alleviate the transport woes of residents of the heavily populated city, who continue to rely greatly on private vehicles in the absence of a strong public transit network.
Singapore LRT: Pioneer in the region
Singapore operates three LRT lines of a total length of around 29 km, and covering 37 stations. The first line became operational in 1999, with the most recent one operationalised in 2005. SMRT Light Rail Pte Ltd that was set up in 1997 operates Singapore’s first fully automated LRT system – the 7.8 km Bukit Panjang LRT system. SBS Transit operates two other lines – the Sengkang and Punggol lines – which total about 21 km.
The lines use rolling stock by Bombardier and Mitsubishi Heavy Industries. Average daily ridership on the light rail increased at a CAGR of 11.7 per cent during 2001–11; it stood at 0.11 million in 2011.
The LRT acts as a feeder system to the MRT lines and uses the same fare system as the MRT. In fact, Singapore uses the most advanced fare system in Southeast Asia. It has an interoperable system that combines the payments of all public transport modes and retail purchases. A contactless smart card called EZ-Link is used for fare collection on public transit (bus, MRT, and LRT), taxi fares, motoring (parking), and retail transactions. This interoperable system was introduced in December 2008 with the aim of transforming Singapore into a largely cashless society.
Upcoming light rail projects
Manila: Bumpy start for new projects
One of the 30 largest public–private partnership (PPP) projects on offer by the Philippines’ DOTC is the much-talked-about Line 1 Cavite extension project of the Manila LRT. It involves the construction of the 11.7 km Baclaran–Bacoor stretch with eight passenger stations, one satellite depot, and three intermodal facilities, at an investment of PhP 60 billion.
Thus far, the project’s fate has been adversely affected by the lack of bidders. Initiated in 2012, the final round of bidding that took place in August 2013 produced only one bid, with three other pre-qualified bidders withdrawing their participation. Moreover, the lone bidder – the Light Rail Manila Consortium of Metro Pacific Investments Corporation and Ayala Corporation – submitted a conditional bid and was declared non-compliant. One of the primary concerns of the bidders had been the massive construction cost of PhP 30 billion.
Currently, the Philippines government is studying the possibility of eliminating the requirement that the winning bidder pay real property taxes on the extension. Furthermore, it is also thinking of extending an undisclosed subsidy amount. A new bidding schedule is expected to be announced in December 2013, upon a review of the revised contract terms by the National Economic and Development Authority (NEDA).
Discussing the project at an economic forum, Transportation Secretary J.E. Abaya stated that the Special Bids and Awards Committee will address the concerns of private players, which include the power rates, the warranty on the existing structure, and a subsidy bid. Abaya stated, “We’re eyeing to rebid the project between January and February (2014), since we have to discuss the changes that we are proposing with NEDA. Once we get the approval, we will do a one-stage procurement process.”
Furthermore, plans are afoot for a few line extension projects. Specifically, Manila LRT’s Line 1 is being extended northwards at an investment of over PhP 10 billion. Similarly, Line 2 will be extended further eastward by 4.14 km. This extension that encompasses two new stations will entail an investment of PhP 9.76 billion, which will be fully funded by the government. In April 2013, DOTC shortlisted five bidders for the PhP 350 million consultancy contract for the civil works of the LRT-2 east extension project; the contract has yet to be awarded.
Manila’s PhP 1.72 billion MRT–LRT integrated ticketing system contract has also been plagued by issues. Though DOTC had shortlisted five consortiums for the project, it has recently issued a special bid bulletin to defer the submission of the technical and financial proposals due to changes in the concession agreement. The five pre-qualified consortiums were supposed to have submitted their technical and financial proposals by August 30, 2013. Meanwhile, DOTC has invited bids for the supply of 2.3 million magnetic tickets at a contract value of PhP 17 million; the winning bidder is expected to be announced by November 2013.
There are also plans to procure new rolling stock. Once the development contract for Line 1 Cavite extension is finalised, a total of 55 new train sets will be acquired at an investment of about PhP 31 billion. Moreover, upgrades of the existing rolling stock will also be taking place: 63 trains of Line 1 will undergo body repair with government funding of PhP 1.33 billion, while the air-conditioning units of 18 trains of Line 2 will be renewed with a grant of PhP 539.6 million.
Thailand: Major opportunities abound for railway-related businesses
The Bangkok SkyTrain is experiencing significant expansion activity. For a start, the 5.25 km Wong WianYai–Bang Wa and the 10.6 km Bearing–Samut Prakan lines are currently under construction. CNR has secured the contract to provide rolling stock for the former extension at a value of 1.5 billion baht. More interestingly for product and service providers, five new lines are being planned:
- Mo Chit–Saphan Mai
- National Stadium–Yot Se
- Samut Prakan (Bang Ping)–Bang Pu
- Bang Na–Suvarnabhumi airport
- Saphan Mai–Khlong 6
These extensions will offer major opportunities for consultants, developers, contractors, rolling stock and technology providers, etc. over the next 5–10 years.
Finally, Phuket is also planning to build an LRT system. The proposed network comprises two lines that will span over 75 km across 19 stations. The project received in-principle approval from the government in March 2012. The cost of building the system is estimated at around 15 billion baht. Several international companies, including China-based Mashucon Company Limited, Thailand-based Gold Phoenix Construction Consultant, and Australia-based UGL Rail Limited, have expressed their interest in this project.
Kuala Lumpur: Embarking on massive expansion and upgradation projects
In Kuala Lumpur, SPNB intends to spend RM 7 billion to expand its network by about 34 km by 2014. Twenty-six new stations will be added as part of this expansion. The key contractors for this project include the Malaysian–UK joint venture (JV) comprising CMC Engineering, Colas, and Uniway (RM 670 million); the Malaysian JV of Trans Resources Corporation Sdn Bhd, UEM Builders, and Intria; along with another Malaysian JV of George Kent Berhad and Lion Pacific Sendirian Berhad.
The main contractors for the KJL and Ampang Line extension projects are responsible for the construction of a guideway substructure and main structure works; the installation of foundations for stations, traction power substations, and segmental box girders; along with the supply and installation of parapets and noise barriers. The main contractors will also be expected to manage subcontractors for contracts worth RM 469 million and RM 305 million for these two projects.
Furthermore, the Kuala Lumpur LRT will add 20 six-car light rail vehicles that are being purchased from CSR Zhuzhou Electric Locomotive Company Limited under a RM 530 million contract. In addition, the Thales Group is installing SelTrac communications-based train control on the Ampang Line.
At the same time, the fare system is also being revamped. In July 2013, Spain-based information technology solutions provider Indra Sistemas SA secured a Euro 28 million contract to design and construct an integrated control centre for the LRT lines. The contract covers a two-year construction period and a two-year maintenance warranty. Indra will install an advanced integrated management system, a data centre, as well as communications technology and energy management systems. This system will enable remote monitoring and optimise rolling stock and staff schedules.
Singapore: Improving the quality of its LRT system
A few key initiatives were taken last year to improve service quality on the LRT. A contract for conducting the feasibility study on two-car operations for the Sengkang and Punggol LRT lines has been completed. In addition, software and hardware modifications were implemented on the signalling system to improve the quality of train rides.
Going forward, 13 train cars are being procured for the Bukit Panjang LRT line. When delivered by 2014, they will help to ease the loading levels on the LRT network.
Mixed prospects for the future
Although the three larger cities (Bangkok, Kuala Lumpur and Manila) discussed in this article, have laid down major investment plans, there are city- and country-specific risks and issues that may undermine the progress of these ambitious projects. As the region braces itself for a slowdown, economic factors will pose the greatest threat to the successful implementation of these plans.
Among the three cities, Kuala Lumpur, with its key contracts already awarded, is in a favourable position. However, the city has not revealed any long-term plans for light rail development. In addition, Malaysia’s economy grew by only 4.3 per cent during the April–June quarter of 2013; the central bank has reduced its forecast for full-year growth to 4.5–5 per cent from 5–6 per cent.
Similarly, Bangkok’s SkyTrain investments could also be negatively affected by the Thai economy’s recession. Economic growth has slipped in recent times: projections for growth in 2013 have been reduced to 3.8–4.3 per cent from 4.2–5.2 per cent. Further, Bangkok suffers from major environmental risks. The city witnessed flooding in 2011 and 2012 and floods are also predicted for 2013. In addition, the World Bank in its latest report has projected that major portions of Bangkok will be flooded by 2030.
Manila offers the maximum investment opportunity as its system is the least developed among the three cities. However, it is already facing several issues, primarily due to the authorities’ lack of experience in structuring PPP projects. Nonetheless, it will likely overcome these issues sooner rather than later. Finally, the Philippines’ economy is registering higher growth than its Southeast Asian peers – almost 7 per cent since the third quarter last year, which will also aid its light rail development and turn Manila into an attractive investment destination.
