How does the RM28 billion cost of MRT Line 2 account for exchange rate fluctuations?

Question

Accepted Answer

MRT Line 2 Construction Costs Remain Unaffected by Ringgit Depreciation

The projected construction cost for MRT Line 2, estimated at RM28 billion, is structured to remain insulated from fluctuations in the ringgit's exchange rate. This figure already incorporates considerations for the local currency's value, meaning that a decline in the ringgit will not necessitate an upward revision of the overall project budget.
Pre-Incorporated Exchange Rate Considerations

The RM28 billion budget allocated for MRT Line 2, which spans from Sungai Buloh to Serdang and Putrajaya, has been formulated with the prevailing and anticipated local currency exchange rates factored into its estimation. This proactive approach ensures that currency market movements are accounted for within the initial financial planning of the project.
Minimal Impact on Imported Components

While the article does not detail the specific financial mechanisms employed, it indicates that the cost of imported components for MRT projects is generally managed to minimise the impact of currency depreciation. For MRT Line 1, which has a total cost of RM23 billion, the increase in expenses for imported items like trains and electronic systems due to the ringgit's decline was reported as a modest RM600,000. This suggests a similar strategy is in place for Line 2 to maintain cost stability.
Project Timeline and Financial Planning

MRT Line 1 is scheduled to commence operations in July 2017, with construction having begun in August 2012. MRT Line 2 is currently in its preliminary stages, with operations anticipated to start in 2021. The established timelines for these projects allow for comprehensive financial planning, including the integration of exchange rate considerations into their respective multi-billion ringgit budgets.

Reading history

Hide →

This history is cleared when the page is closed.

How does the RM28 billion cost of MRT Line 2 account for exchange rate fluctuations?

Loading

Was this article helpful?

Helpful

Not helpful

Report an issue

1

0

0

Share with friends