News: Cost Of LRT 3 Must Reduce By Far More Than RM6 Billion To Proceed

Jul 12, 2018

The Finance Ministry will not support any additional funding for the Light Rail Transit Line 3 (LRT3) unless the cost for the project is drastically reduced by Prasarana Malaysia Bhd, reported The Sun Daily.

While the cost of LRT3 has been reportedly capped at RM9 billion, the project’s cost has been forecasted to increase by as much as RM31.45 billion.

In 2015, Prasarana had secured a RM10 billion bond facility that was guaranteed by the government. On 30 March 2018, the company requested an additional RM22 billion in government guarantee in order to ensure funding for the construction and completion of the 37km rail line.

“The projected total cost of LRT3 of RM31.45 billion due to poor management by Prasarana requires drastic cost reductions to make the LRT3 feasible and cost effective. Certain news reports have indicated that the LRT3 can be reduced by RM6 billion,” said MoF in a statement.

“The Ministry of Finance wishes to state that much more than RM6 billion must be reduced if the LRT3 project is to proceed.”
More: Find Properties Located Close To Rail Networks
Sources revealed that the cost for completing the LRT3 can be reduced by almost RM6 billion should it revert to the original design, reported The Star.

This comes as the additional variation orders by Prasarana Malaysia Bhd had raised the cost of the project to RM15 billion.

It is understood that the figure does not include borrowing and land acquisition costs.

“They, Prasarana, had supersized the project and that is why the cost ballooned,” said a source.

Prasarana appointed Malaysian Resources Corp Bhd (MRCB) and George Kent (M) Bhd (GKent) as the project delivery partner (PDP) for the LRT3 project in 2015 at an approved budget of RM9 billion.

Upon signing the PDP agreement, Prasarana increased the number of stations from 26 to 30.

It also changed the number of cars each train would be carrying from four to six while shortening the time within which the consortium would complete the project from eight years to less than six years.

The source explained that the project cost could be lowered by slashing the number of stations to the original plan of 26 and reducing the number of cars in each train to between two and three.

The consortium should also revert to a more linear design for the LRT station instead of the sophisticated but rigid design suggested by Prasarana to accommodate the six-car trains.

“Redesigning the station would also save on the cost of land acquisition,” added a source.

Running from Bandar Utama to Klang via Shah Alam, the LRT3 project is expected to have a capacity of 36,700 passengers per hour each way.

Image sourced from Star Online

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