MRT Corp today dismissed claims of an uncontrolled escalation in costs for the Mutiara Line LRT project in Penang, providing a breakdown of the figures involved in its revised budget ceiling of RM16.8 billion.
Acknowledging the initial estimated cost of RM10 billion in 2016, it said the project, known then as the Penang LRT Bayan Lepas project, only spanned from Silicon Island to Komtar at the time.
It said the project cost was increased to RM13 billion after it was taken over by the federal government in 2024, with an extended alignment from Macallum to Penang Sentral.
The budget was further revised to RM16.8 billion in December 2024, with MRT Corp mandated to keep the cost lower, it said.
In a statement, it said a conditional contract valued at RM8.31 billion was awarded to SRS Consortium Sdn Bhd in January this year for the civil main contract package 1. This amount was eventually reduced to RM7.93 billion following a value management exercise in April.
“The budget ceiling of RM16.8 billion also includes the land acquisition cost which is now estimated at approximately RM2 billion.
“The balance RM6.8 billion is for the civil main contract package 2, light
stabling depot at Sungai Nibong, and systems turnkey contract – all of which have yet to be awarded, as well as project management and consultancy costs,” it said.
“MRT Corp reiterates that the revised ceiling does not represent uncontrolled cost escalation. It primarily reflects the prevailing market conditions over the last eight years.”
The Mutiara Line is expected to span 29.5km overall with 21 stations, linking a reclaimed island near the airport to Komtar, and onward via a cross-channel bridge to Butterworth.
On Monday, transport minister Loke Siew Fook told the Dewan Rakyat that the project budget was around RM16.8 billion.
MCA vice-president Tan Teik Cheng subsequently expressed concern over the increase in projected cost, saying that public funds were involved.
Tan, the MCA Penang chief, said it was unacceptable for the transport ministry to attribute the ballooning cost to so-called “value management” without providing a detailed breakdown of what this entailed.
