LRT3 sets base for restart of other mega projects

Other projects that have been shelved include the Malaysia-Singapore HSR, ECRL and 2 gas pipelines


THE continuation of the Light Rail Transit Line 3 (LRT3) project could set the motion of the revival of other deferred infrastructure projects.

The initial rail line — which would connect Bandar Utama in Petaling Jaya with Johan Setia in Klang — was among the first few mega projects to be reviewed by the government as Putrajaya set to trim its massive debt.

Other projects that have been shelved include the 350km high-speed rail (HSR) link between Malaysia and Singapore, the US$20 billion (RM81.6 billion) East Coast Rail Link (ECRL) and two gas pipelines worth US$2.3 billion.

Construction works are set to continue in the second half of this year at a reduced cost of RM16.63 billion, a 47% drop from the original cost of RM31.65 billion. Completion date is expected on Feb 28, 2024.

The reduction came after the government forced the reduction of stations to 20 terminals, the parking facilities to shrink from 6,000 to 2,300 bays, and revised the selection of trains from 42 sets of six-car trains to 22 sets of three-car trains.

The implementation concept of the project was also remodelled from a project delivery partner regime to a fixed-price contract regime, which shields the government from any cost fluctuations.

Prasarana Malaysia Bhd remains as the project operator, with joint-venture Malaysian Resources Corp Bhd-George Kent (M) Bhd as the main contractor.

The two parties, along with nine work package contractors signed a novation agreement last Friday, witnessed by Finance Minister Lim Guan Eng, Transport Minister Anthony Loke Siew Fook and Federal Territories Minister Khalid Abd Samad.

Lim, who stressed on making provisions for “current” needs and demands, said the project will continue to be funded by the Ministry of Finance via a mixture of loans and guarantees.

“When you talk about funding, it is all about timing. If you match it wrongly, the cost of interest will kill you,” Lim said during the signing of novation agreement for the LRT3 in Kuala Lumpur last Friday.

“The variation orders are the ones that will cause the contracts to be inflated, and this was previously the case. They can be inflated almost double. We want to ensure that what we see now is what we get, in terms of pricing, when the project is completed,” he said.

Meanwhile, Khalid said this was the “right way” to go.

“I believe, Pakatan Harapan, we are going to carry on in this manner. No cancellation of projects,” he said.

“We are not anti-development. This is all very important. But we want it to be done correctly and save money as well. No excessive expenditure.”

With the negotiation team from China expected to be in town this week, the revival of the LRT3 project is another tell-tale sign that the prospect looks bright for the ECRL.