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- It dismissed claims that the revised ceiling does not reflect “uncontrolled cost escalation” but adjustments to market realities since the project was first mooted nearly a decade ago.
KUALA LUMPUR (Aug 21): Malaysia Rapid Transit Corporation Sdn Bhd (MRT Corp) said on Thursday that the approved higher ceiling price of RM16.8 billion for the LRT Mutiara Line project was due to cost inflation and increased scope of work, not cost overruns.
The project developer and asset owner of the LRT Mutiara Line said the adjustment reflects prevailing global inflation, rising land acquisition costs, and additional works at Macallum and Silicon Island.
It dismissed claims that the revised ceiling does not reflect “uncontrolled cost escalation” but adjustments to market realities since the project was first mooted nearly a decade ago.
"The federal government approved a project budget ceiling of RM16.8 billion and MRT Corp has been mandated to keep the cost lower. The actual project cost would depend on results of ongoing and upcoming open tender exercises," the transportation agency said in a statement.
It added that the ceiling also covers an estimated RM2 billion for land acquisition. Meanwhile, the balance of RM6.8 billion is allocated for civil main contract package 2, the Light Stabling Depot at Sungai Nibong, the Systems Turnkey Contract—all yet to be awarded, as well as project management and consultancy costs.
Transport Minister Anthony Loke Siew Fook had told Parliament earlier this week that the ceiling was between RM16 billion and RM17 billion, higher than the RM10 billion figure announced by Prime Minister Datuk Seri Anwar Ibrahim in Budget 2024. He said the earlier figure was a preliminary projection that did not account for detailed value management and engineering assessments.
“The ceiling is set higher than what is required, but we will try to reduce costs through open tender,” Loke said during his winding-up speech on the 13th Malaysia Plan previously.
The LRT Mutiara Line will span 29.5km, with 21 stations connecting Penang Island to the mainland. Initially estimated at RM10 billion in 2016 for the Bayan Lepas alignment from Silicon Island to Komtar, the project cost was raised to RM13 billion in early 2024, when the federal government took over and extended the alignment to Macallum and Penang Sentral.
In January this year, the government awarded the first of three work packages—covering a 24km stretch from Komtar to Island A of the Penang South Reclamation project with 19 stations—to SRS Consortium, which is led by Gamuda Bhd (KL:GAMUDA) with a 60% stake, while Loh Phoy Yen Holdings Sdn Bhd and Ideal Property Development Sdn Bhd each hold 20%.
Following a value management exercise in April 2025, the contract sum for the first package was reduced to RM7.93 billion, according to MRT Corp.
The agency also explained that it undertook detailed studies, engineering reviews, and railway alignment refinements to finalise the project scope and assess costs. Independent cost assessments were also sought from two quantity surveyor firms, it added.
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