MRT Corp: RM16.8 Bln LRT Mutiara Line Budget Reflects Market Conditions, Not Cost Overrun
KUALA LUMPUR, Aug 21 (Bernama) -- The revised RM16.8 billion ceiling for the LRT Mutiara Line is not an uncontrolled cost escalation but reflects market conditions over the past eight years, according to Malaysia Rapid Transit Corporation Sdn Bhd (MRT Corp).
The company said based on market data in 2024, the project budget needed to be revised to reflect global supply chain inflation, escalation of land market value and additional works at Macallum as well as Silicon Island.
"In December 2024, the Federal Government approved a project budget ceiling of RM16.8 billion and MRT Corp has been mandated to keep the cost lower. The actual project cost would depend on results of on-going and upcoming open tender exercises," it said in a statement.
In January 2025, MRT Corp added that a conditional contract valued at RM8.31 billion was awarded to SRS Consortium Sdn Bhd for the Civil Main Contract Package 1.
As part of the contract conditions, the contract was subject to a value management exercise in April 2025, which eventually reduced the contract sum to RM7.93 billion, it explained.
"The budget ceiling of RM16.8 billion also includes land acquisition cost which is now estimated at RM2 billion.
"The balance RM6.8 billion is for Civil Main Contract Package 2, Light Stabling Depot at Sungai Nibong and Systems Turnkey Contract, all of which are yet to be awarded, as well as project management and consultancy costs," it said.
The first phase of the project covers a 24 km stretch from Komtar in George Town to Island A under the Penang South Island project, with 19 stations and supporting works.
The Mutiara Line will span 29.5 km with 21 stations from Silicon Island to Komtar and across to Penang Sentral in Butterworth.
According to MRT Corp, the original estimated cost for the implementation of the Penang LRT Bayan Lepas Project was RM10 billion in 2016, based on an alignment stretching from Silicon Island to Komtar.
Later, the Federal Government in early 2024 made the decision to take over the project, now known as LRT Mutiara Line, with an extended alignment from Macallum to Penang Sentral.
With the enhancement, it said the project cost was increased by RM3 billion to RM13 billion, benefiting a larger catchment area and improving service reach.
Transport Minister Anthony Loke Siew Fook reportedly said the project will be paid upfront from the development budget to avoid liabilities later.
Loke said the funds for the LRT project will now be allocated through the yearly development expenditure (DE) budget.
-- BERNAMA