The budget ceiling for the LRT Mutiara Line LRT project in Penang has been revised to RM16.8 billion due to current market conditions, and not because of uncontrolled cost escalation, stated MRT Corp, reported The Star.
The Penang LRT Bayan Lepas project was originally estimated in 2016 to cost RM10 billion, based on the projected alignment from Silicon Island to Komtar, MRT Corp CEO Datuk Mohd Zarif Hashim previously said.
“When the Federal Government took over the project in early 2024, it was renamed the LRT Mutiara Line and its alignment extended from Macallum to Penang Sentral. This expanded scope raised the cost to RM13 billion, enabling the line to serve a wider catchment area,” MRT Corp said in a statement.
The budget ceiling includes around RM2 billion for land acquisition, while RM6.8 billion will go towards Civil Main Contract Package 2, the Sungai Nibong depot, systems turnkey contracts, and project management costs, MRT Corp stated. “MRT Corp reiterates that the revised ceiling does not represent uncontrolled cost escalation, but reflects prevailing market conditions since the last eight years,” it said.
At the start of the Mutiara Line’s main construction phase in July this year, Zarif said that the inclusion of inflation adjustments, land acquisition, and the construction of a five km bridge that will link Komtar to Penang Sentral in Butterworth would typically have pushed costs to RM18-19 billion, however cost-optimisation measures have saved the government RM2 to RM3 billion.
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