MRT Corp: Penang LRT cost rises to RM16.8b, driven by land prices, inflation and route extension to Seberang Perai

GEORGE TOWN, Aug 21 — The RM16.8 billion budget allocated for Penang’s LRT Mutiara Line reflects current market conditions, particularly land acquisition costs that have risen since 2016, MRT Corp said today.

The company explained that the original estimate of RM10 billion, made eight years ago for the Bayan Lepas LRT project, only covered the alignment from Silicon Island to Komtar.

“In early 2024, the federal government took over the project — now rebranded as the LRT Mutiara Line — and approved an extended alignment from Macallum to Penang Sentral,” it said in a statement.

The clarification follows Transport Minister Anthony Loke’s recent announcement that the project ceiling budget has been set between RM16 billion and RM17 billion. MRT Corp said the extension across to Seberang Perai alone added RM3 billion to the cost, bringing it to RM13 billion, while global supply chain inflation, higher land values and additional works at Macallum and Silicon Island pushed the figure to RM16.8 billion.

“The federal government approved the RM16.8 billion ceiling in December 2024, with MRT Corp tasked to keep costs below that level,” it added, noting that the final figure would depend on ongoing and upcoming open tenders.

A conditional contract worth RM8.31 billion was awarded to SRS Consortium Sdn Bhd in January for Civil Main Contract Package 1, later reduced to RM7.93 billion after a value management exercise in April.

The ceiling also covers approximately RM2 billion in land acquisition costs, while the remaining RM6.8 billion is allocated for project management, consultancy, Civil Main Contract Package 2, the Sungai Nibong Light Stabling Depot and the Systems Turnkey Contract — which have yet to be awarded.

Last month, MRT Corp chief executive Datuk Mohd Zarif Hashim said the aim was to keep costs under RM16 billion, describing the LRT Mutiara Line as the “most reasonably priced LRT system in Malaysia”.

The 29.5km line will have 21 stations stretching from Silicon Island to Komtar and onward to Penang Sentral in Butterworth. Completion is targeted for 2031, while three additional planned lines covering Tanjung Bungah, Batu Ferringhi and Air Itam are expected to be completed by 2050.