Breaking down the cost for revived LRT3 stations – Shahril Mokhtar

A LOT has been said about the cost of the revival of five stations in the Light Rail Transit (LRT) 3 project in Budget 2024.

As someone who was closely associated with the LRT3 project during the inception stage, I can support the prime minister-cum-finance minister’s answers in Parliament on October 27 with regard to the timeline and cost of the project.

But before that, a little bit of history.

Back in 2018, after the 14th general election, the then government led by Tun Dr Mahathir Mohamad decided to reduce the cost of the project, largely due to “omissions of scope”, and this included shelving the five stations.

Then finance minister Lim Guan Eng announced that the project had been scaled back from RM31.5 billion to RM16.63 billion – reducing the project cost by 47% with savings of RM15.02 billion. (It must be stressed that of the initial RM31.5 billion, RM9 billion was the actual construction cost, while the rest was for crucial components including the purchase of the trains, land acquisition and supporting infrastructure.)

He also said the completion of the project will be pushed to the year 2024 from the original completion date of 2020. This is logical, as the tighter the timeline, the more it will cost in terms of resources to meet the deadline.

Fast forward to 2020, the project was hit by the onslaught of the Covid-19 pandemic. Hence, the project was impacted on two occasions – by politics and pandemic.

To its credit, project owner Prasarana Malaysia Bhd, managed to reduce the time lost during the pandemic and scheduled an opening date of Phase 1 on March 1, 2025.

This was confirmed by Transport Minister Anthony Loke in Parliament on November 2 where he reiterated that Phase 1, which covers the entire 37.8km track and 20 existing stations, is expected to begin operations on March 1, 2025.

He also revealed that Phase 2, which covers the reinstated stations – Tropicana, Raja Muda, Temasya, Bukit Raja and Bandar Botanik – will commence in the second quarter of 2027.

Now, with regard to the recent budget announcement for the five stations amounting to RM4.7 billion, we cannot compare the 2018 cost with the current cost.

The Covid-19 pandemic had taken full effect on the construction supply chain. This, coupled with the severe weakening of the ringgit and the Russia-Ukraine conflict, drove the cost higher to what it is today.

This includes rising costs of raw materials such as steel and cement; higher financing costs, for example, extension of bonds; the rise in cost of systems equipment that is purchased abroad and depends heavily on the ringgit’s movement; and the rise in cost of land acquisitions as the five stations are located in prime areas.

An October 30 article in Scoop revealed that the cost of raw materials had risen by 30% between 2018 and 2023.

Prasarana went into further details in a response published in Scoop on October 30.

It said the cost of RM4.7 billion covers – the physical construction and provisions to support the five stations, including power supply, distribution, and communication systems, and the procurement of three additional three-car train sets to maintain the three-minute headway for LRT3, since the journey time for each train from end-to-end will be slightly longer with the additional stations.

The cost, Prasarana said, will also cover the expansion of the train depot, which involves adding a new stabling track that covers the trackwork and power conductor rail, signalling and train control system, depot equipment, and maintenance vehicle.

Other costs include the installation of a Platform Screen Door System for all 25 stations to enhance passenger safety; an Independent Checking Engineer, project management, fees to local authorities and service providers, duties and taxes, interests during construction, insurance as well as legal fees; the construction of bus depots; additional costs incurred for annual insurance premiums; and the development of the Automatic Fare Collection system.

Granted, RM4.7 billion is a lot of money, and its expenditure is a cause for concern to taxpayers if not explained properly.

The rakyat also needs to know that while LRT3 will make public transport in the Klang Valley faster and more efficient, such projects also help stimulate the economy, benefiting contractors, suppliers, construction firms, and utility companies, among others. Not to forget the thousands of jobs they create.

The success of any project, be it a minor one or a mega one like rail infrastructure, hinges on the support of the rakyat.

Inaccurate aspersions can defeat a beneficial project while casting unfair impressions on those involved in it.

The rakyat is the most important stakeholder, which is why all efforts must be made to explain to them where and how their tax money is being spent.

I hope this explanation helps in offering some clarity on a much needed and beneficial national project. – November 7, 2023

Datuk Seri Shahril Mokhtar is the former group managing director of Prasarana Malaysia Bhd