FOLLOWING A COMPREHENSIVE REVIEW, THE LIGHT RAIL TRANSIT PROJECT WILL LIKELY BE BACK ON TRACK BY NOVEMBER
Here’s the good news for commuters: the Light Rail Transit 3 (LRT3) project will probably be back on the cards by November. The bad news, however, is this decision comes after contractors agreed to lower the project cost, which means the original scope of the project may be impacted.
According to sources close to the deal, the joint-venture between Malaysian Resources Corp Bhd-George Kent Bhd (MRCB-GK) joint venture will continue to be the main delivery partner for the project.
Like other construction projects entered into by the previous administration, the viability of the LRT3 became a question mark a few months ago when the MoF revealed that the projected total cost of the line had ballooned to RM31.65 billion.
Finance Minister Lim Guan Eng had, in July, noted that project owner Prasarana Malaysia Bhd had in 2015, secured a government guarantee for a RM10 billion bond facility to fund LRT3.
However, on March 30, 2018, about a month before the May 9, 2018 election upset, the state-owned transportation company asked for an additional RM22 billion worth of government guarantee for the construction and completion of the project.
Under the direction of the Finance Ministry, the total cost has now been reduced to RM16.63 billion. StarBiz recently reported that this agreement was reached amicably with the main contractors of the project, who agreed to revise the cost in order to ensure its continuation.
The RM16.63 billion figure is to include all project costs, including but not limited to work package contracts, land acquisition, project management, consultancy fees, operational and overhead costs and interest during construction.
In recent months, news reports cited that work LRT3 had visibly slowed and it was speculated that this was a result of uncertainties concerning the financial viability of the project. Since the new government took power this year, the country has adopted prudent fiscal approach towards large scale projects, promising to shelve projects that are deemed to costly for the nation.
At press time, it is unclear whether Prasarana, the contractors and MRCB-GK have officially signed off on the newly proposed design and reviewed contract for LRT3.
It is believed that the project’s altered design and contracts will be finalised by the end of October and work will resume in November.
Sources said the revised design and contracts are expected to be firmed up before the end of October with work to continue at full steam by November.
Some of the main changes to the LRT 3 plan, which were suggested by the Ministry of Finance earlier this year, include:
- Reducing the order of 42 sets of six-car trains to 22 sets of three-car trains. A feasibility study of LRT3 suggested that 22 sets of three-car trains are sufficient to cope with the passenger demand until the year 2035;
- Reducing size of LRT train depot due to significantly reduced number of LRT trains to be acquired;
- Streamlining the size and design of LRT stations based on Kelana Jaya LRT line standards instead of benchmarking them against the larger MRT stations;
- Shelving the construction of five stations with low projected passenger ridership, namely Lien Hoe, Temasya, Sirim, Bukit Raja and Bandar Botanic;
- Cancelling a 2km tunnel and an underground station at Persiaran Hishamuddin, Shah Alam; and
- Extending the timeline to complete LRT3 from 2020 to 2024 to reduce construction cost which was inflated due to “acceleration costs”.
The 37km line is considered a critical project meant to alleviate the issue of traffic congestion along one of the most important and densely populated development corridors in the Klang Valley, from Johan Setia in Klang to Bandar Utama, Petaling Jaya.
The LRT3 project is expected to serve a population of 2 million with the capacity to transport 36,700 passengers per hour each way.