MCA has expressed concern over the escalation in the projected cost of the Penang Light Rail Transit (LRT) project, saying that in just a year, the cost has surged from the RM10 bil as announced in Budget 2024 to an astonishing RM16 bil to 17 bil.
Its vice president Datuk Tan Teik Cheng said as a large-scale infrastructure project funded by public funds, the Penang LRT has serious implications for national fiscal sustainability and the responsible use of taxpayer monies, and the public deserves a clear, honest, and comprehensive explanation from the government for this drastic increase.
“The government must approach such a project with rigour, transparency, and professionalism,” he stressed.
“The rapid cost surge, the unexplained change in financing model, and opaque procurement processes all raise serious concerns about transparency and governance.”
Tan, who is also the MCA Penang state liaison committee chairman said it is unacceptable for the Transport Ministry to attribute the RM7 bil ballooning to so-called “value management” without providing the public with a detailed breakdown of what this entails.
“If cost efficiency was the objective, why has the price skyrocketed by over 70%? What components of the project were revised? Could this be a case of inflated projections or misrepresented spending?” he asked.
“Originally, the LRT was proposed under a Public-Private Partnership (PPP) model to lessen the government’s financial burden and distribute risk.
“Yet the government has since reversed course, announcing that the entire project will now be fully funded by federal allocations, citing an alleged “budget surplus” in the Transport Ministry.”
According to Tan, this raises critical questions:
- Was there a thorough financial audit and parliamentary approval before this change?
- Did private entities withdraw due to concerns about feasibility or profitability?
- Has the full financial risk now been shifted onto ordinary Malaysians?
“The Penang LRT is not just a regional undertaking but a national expenditure that all Malaysians will shoulder. The government must not proceed when transparency, professionalism, or accountability are still lacking,” he stressed.
“The rakyat has every right to demand answers and to scrutinise how this RM17 billion will be spent. Until the government provides a full, honest, and transparent account, we must continue to question and hold it to account.”
On Monday (Aug 18), Transport Minister Anthony Loke announced a budget ceiling of RM16 bil to RM17 bil for the Penang LRT project.
Loke said this figure differs from the RM10 bil previously announced by Prime Minister Datuk Seri Anwar Ibrahim in Budget 2024 because the earlier amount was a preliminary projection that did not account for value management and value lab exercises.
These are structured approaches used to improve the value of a project and often applied in large-scale projects to ensure the best outcome for all stakeholders.
This ceiling amount, however, does not mean it is the final cost of the entire project, he said, adding the government has yet to award the second and third work packages.
Loke told Parliament during the winding-up debate on the 13th Malaysia Plan said the ceiling is set higher than what is required but they will try to reduce costs through open tender.
Dubbed the Mutiara Line, the Penang LRT will span 29.5km and feature 21 stations, connecting Penang island to the mainland. ‒ Aug 21, 2025
Main image: The Star
