We Cannot Simply Compare Based On Forex

Malaysia's ERL - better than London's Heathrow Express?? Wow!

I'm so sick and tired of both the government and private sector who has the tendency to compare loosely based on foreign exchange when justifying their claims that prices in Malaysia (for whatever products or services) are cheaper than other countries.

The latest was Dr. Aminuddin Adnan, CEO of Express Rail Link (ERL) Sdn Bhd who said that the ERL (Malaysia's high speed train from Kuala Lumpur to the Kuala Lumpur International Airport) is better than the ones in Europe, particularly the Heathrow Express. The story was published in the New Straits Times yesterday. The statement was made by the CEO to refute claims by Keretapi Tanah Melayu Berhad Workers Union president Abdul Razak Md Hassan that the service was not practical and cost-effective in a report in Mingguan Malaysia on Sunday when rejecting a proposal by YTL Corporation (ERL's parent company) to start a bullet train service from Kuala Lumpur to Singapore.

Come on, ERL better than Heathrow Express? Oh please. I've been on the latter during my visits to London - you cannot compare with ERL. Period.

Anyway, what Dr Aminuddin meant by saying ERL is better than the ones in Europe was in terms of cost and also ticket price. The CEO claims that overall expenditure on the project was RM2 billion, which remained the lowest cost per kilometre, or RM35 million, (20 per cent of the cost of Heathrow Express in London).

Aminuddin added that the ERL service was 99.7 per cent reliable, which was much better than similar services in Europe or local train services. He also said the RM35 fee per trip was significantly cheaper than in London which charged STG17 (RM107) for half the distance.

Now, this is what I want to refute - it costs RM107 for a ride on the Heathrow Express from Heathrow International Airport to London's Paddington Station. Of course it would cost that much for a Malaysian but for a British, it is a straight forward 17 bloody pounds! And to the Brits, 17 bloody pounds is the same as RM17, get it?! If Dr Aminuddin really wants to claim that ERL is cheap, why not reduce the price from RM35 to say RM20? I'd say that's a fair price, don't you think?

This is exactly our problem. We like to compare loosely based on foreign exchange. I'll give you a simple example. Say you travel to London for a vacation and you walk into a McDonald's for your favourite Double Cheeseburger. Here in Malaysia, the burger would cost about RM4.75 or let's just round it up to RM5. In London, the same burger would cost about STG3.50 or let's just round it up to STG4. Okay, and now comes the foreign exchange calculation - STG4 x 7.5 = RM30. Would you say that the Double Cheeseburger in London is bloody expensive because its RM30?? Or would you just take it at face value, and pay the bloody STG4 like any other Brit for the burger? If we are so obsessed with calculating forex, don't even bother to holiday in Europe, US, Australia or any country of which the forex is to our disadvantage. Because the fact is, our Ringgit is what it is at the moment, not as strong as the USD, STG, Euro or the AUD.

And I won't even bother to discuss about our government's tendency to compare, again loosely on forex, when claiming that our fuel prices are the cheapest in South East Asia (except for Brunei). Meaning Brunei is still the cheapest, right? And what about fuel prices in the United States? Over there in the great land of Uncle Sam, they charge fuel by the gallons. Miles per gallon. That's why Americans can afford to drive fuel guzzlers with mammoth engine capacity - V8s, V10s, V12s. We're talking 5.0 or 6.0 litres family sedans and SUVs here.

Stop this nonsense comparison please!