Guan Eng blames Prasarana’s poor management for high LRT3 cost

The finance minister says the government will not support any additional funding request by Prasarana Malaysia Bhd unless the cost is significantly rationalised.

Finance Minister Lim Guan Eng says the high projected cost for the LRT3 is due to poor management by Prasarana Malaysia Bhd.

PETALING JAYA: Finance Minister Lim Guan Eng today said the projected total cost of the Light Rail Transit 3 (LRT3) project, which now stands at RM31.45 billion, needs to be drastically reduced to make it feasible and cost-effective.

In a statement, he alleged that the current cost for the development of the 37km line was due to poor management by Prasarana Malaysia Bhd.

“Certain news reports have indicated that the LRT3 cost can be reduced by RM6 billion. The ministry of finance wishes to state that much more than RM6 billion must be reduced if the LRT3 project is to proceed,” he said.

He said although Prasarana had secured a government guarantee for a RM10 billion bond facility to fund the project in 2015, it had on March 30 this year requested for an additional RM22 billion in government guarantee to ensure funding for construction and completion.

“The ministry of finance has already requested Prasarana to drastically review the cost of the project to ensure its viability,” he said.

“The ministry of finance will not support any additional funding required for the project unless the cost of the LRT3 project is significantly rationalised without compromising on the integrity of the rail network as well as the safety and the quality of service provided,” he added.

It was reported earlier this month that Prasarana was considering taking over the construction of the LRT3 from its project delivery partner (PDP) to curb its spiralling cost.

According to LRT3’s official website, the PDP, MRCB George Kent Sdn Bhd (MRCB George Kent), was appointed by Prasarana to undertake the design and construction work of the project.

It said MRCB George Kent is a joint venture company between Bursa Malaysia-listed Malaysian Resources Corporation Bhd (MRCB) and George Kent (M) Bhd to specifically undertake the LRT3 project -FMT