Malaysia Oversight

MRT Corp: Penang LRT budget raised to RM16.8b due to land costs, inflation and extended route to Seberang Perai

By MalayMail in August 21, 2025 – Reading time 2 minute
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GEORGE TOWN, Aug 21 — The budget of RM16.8 billion set for the LRT Mutiara Line in Penang was due to market conditions, including land acquisition costs, since 2016.

According to MRT Corp, the original estimated cost for the Penang LRT Bayan Lepas project was set at RM10 billion eight years ago, as the original alignment was only from Silicon Island to Komtar.

“In early 2024, the federal government made the decision to take over the project, now known as LRT Mutiara Line, with an extended alignment from Macallum to Penang Sentral,” it said in a statement here.

The statement came to clarify an announcement by Transport Minister Anthony Loke recently that the budget ceiling for the project is now between RM16 billion to RM17 billion.

The extension of the alignment to stretch across to Seberang Perai from the island meant that the project cost was increased by RM3 billion from RM13 billion, said MRT Corp.

The company said that the project budget also needed to be revised to reflect global supply chain inflation, escalation of land market values, and additional works at Macallum as well as Silicon Island based on market data in 2024.

“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,” it said.

It stressed that the actual project cost would depend on results of ongoing and upcoming open tender exercises.

It said a conditional contract, valued at RM8.31 billion, was awarded to SRS Consortium Sdn Bhd for the Civil Main Contract Package 1 in January this year.

As part of the contract conditions, the contract was subject to a value management exercise in April and this eventually reduced the contract sum to RM7.93 billion.

“The budget ceiling of RM16.8 billion also includes land acquisition cost which is now estimated at approximately RM2 billion,” it said.

It said the balance RM6.8 billion is for project management and consultancy costs, Civil Main Contract Package 2, Light Stabling Depot at Sungai Nibong and Systems Turnkey Contract.

These contracts are yet to be awarded.

Last month, in a media briefing session, MRT Corp chief executive officer Datuk Mohd Zarif Hashim said the developers will try to keep the costs below RM16 billion.

He said the LRT Mutiara Line will be the “most reasonably priced LRT system in Malaysia”.

The LRT Mutiara line is 29.5km with 21 stations from Silicon Island to Komtar and from Komtar to Penang Sentral in Butterworth.

The Mutiara Line is expected to complete in 2031 while there are also three other lines in the plans that will cover Tanjung Bungah, Batu Ferringhi and Air Itam.

All four lines are expected to be fully completed by 2050.



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