KL okays 3rd LRT after costs cut

KUALA LUMPUR • Malaysia has given the green light for the third Light Rail Transit (LRT3) project in the Klang Valley after its construction cost was nearly halved.

Finance Minister Lim Guan Eng said yesterday that the Cabinet approved the 37km-long rail line during a meeting on Wednesday after the final cost was reduced by 47 per cent to RM16.6 billion (S$5.6 billion). That, he said, would enable the country to save RM15 billion.

The rail network in Selangor state - linking Johan Setia, Klang to Bandar Utama, Petaling Jaya - was scrutinised by the new government after its initial cost of RM9 billion ballooned to RM31.7 billion. National rail operator Prasarana had sought additional financing of RM22 billion in the form of government guarantees, on top of the RM10 billion it received in 2015.

Mr Lim said the lower cost was made possible by renegotiating and rationalising the project's specifications with all key stakeholders, including Prasarana, project delivery partner MRCB-George Kent and the Land Public Transportation Commission.

The changes include delaying completion from 2020 to 2024, having fewer and shorter train cars and shelving five low-ridership stations.

The RM15 billion reduction in cost, said Mr Lim, will also mean additional savings of up to RM14 billion in interest cost over the loan financing period.

THE STAR/ASIA NEWS NETWORK

A version of this article appeared in the print edition of The Straits Times on July 13, 2018, with the headline 'KL okays 3rd LRT after costs cut'. Print Edition | Subscribe