This article first appeared in The Edge Malaysia Weekly on October 30, 2023 - November 5, 2023

PRIME Minister Datuk Seri Anwar Ibrahim’s announcement of a RM4.7 billion allocation in Budget 2024 to revive the plan to build five stations on the LRT3 line in Selangor that was cancelled in 2018 has raised eyebrows. The 37km LRT3 line will connect Bandar Utama to Johan Setia in Klang.

The 37km LRT3 line, which is currently under construction, will connect Bandar Utama to Johan Setia in Klang.

Without the five stations, the LRT3 line project cost is about RM16.63 billion, including land acquisition, consultant and project delivery partner (PDP) fees, among others, for 20 stations. 

The rationale then for shelving five stations, namely Tropicana, Raja Muda, Temasya, Bukit Raja and Bandar Botanik, was cost savings, given the government’s tight fiscal constraints. 

With a budget of RM4.7 billion, the average cost to build each station is roughly RM940 million. 

An industry source familiar with the public rail system describes the budget of RM4.7 billion as “ridiculously high”. The source pointed out that for a public railway project, 80% of the cost is for civil construction, with the remaining 20% covering the operating systems, such as signalling and safety.

“In the case of LRT3, some of the civil works for the five stations have already been done — for instance, the tracks are in place, the viaduct is there. There is no sophisticated (civil) work involved. So, why do you need that much to build these stations?

“All that’s required is the installation of network equipment, such as a PA (public announcement) system, along with the escalator and elevator,” the source tells The Edge. 

According to industry sources, the civil works for the five stations are estimated to be RM1 billion or slightly more, and electrification works about RM150 million. Meanwhile, the signalling system plus other elements, such as the intrusion prevention system, will come up to around RM100 million to RM150 million, and communication and IT systems would be roughly RM100 million to RM120 million. 

With five more stations, Prasarana Malaysia Bhd will need more train sets, industry sources say, in order to maintain the frequency. Three new train sets will be required and will cost about RM100 million in total. 

A back-of-the-envelope calculation shows the total cost for the five stations will be RM1.5 billion to RM2 billion. 

“The cost of RM1.5 billion or RM2 billion has taken into account a profit margin of about 25%. Even with the assumption of a fat profit margin of 35%, the five stations would only cost about RM2.5 billion,” an industry analyst explains.

Industry sources allude to other additional costs for the LRT3 project.

It is learnt that Prasarana is considering installing screen door systems at the platform of each station along the LRT3 line, like those at the Mass Rapid Transit (MRT) stations.

“I’ve heard that the government intends to introduce additional systems that may be unnecessary, and will add to the cost and maintenance costs in the long run. For instance, there’s talk of replacing the existing barrier-free system with sliding door-like barriers.

“Sliding door-like barriers are usually used in high-capacity areas with a high volume of commuters, or at underground stations with air conditioning. This barrier system also comes with significantly higher maintenance costs.” says a source.

The Kelana Jaya LRT line, which serves a substantial 300,000 daily commuters, has been functioning effectively with a barrier-free system. This begs the question whether the LRT3 line, which is likely a low ridership line with 80,000 commuters a day, needs the barrier system. 

“Wouldn’t it be wiser to allocate the funds for more practical stuff, like purchasing more train sets to reduce the waiting time?”

Last week (Oct 25), in his debate on Budget 2024, member of parliament for Bukit Bintang Fong Kui Lun pointed out that the Penang LRT project, spanning 23 stations, is estimated to cost RM10 billion, while the five revived stations under LRT3 will cost RM4.7 billion.

“The cost of these five stations is almost half that of the Penang LRT project. Furthermore, these five LRT stations are not a greenfield project, the basic work including the viaduct and basic structure is already ongoing under the current contract,” he said.

Fung questioned the significant cost discrepancy between the two projects, noting that Dewan Rakyat should discuss the issue to ensure the sensible use of taxpayer money and accountability in national projects.

An industry source, however, points out that RM10 billion for Penang’s LRT project is stretched. Still, this does not justify the whopping sum for the five LRT 3 stations. 

The initial LRT3 line, for the western corridor of the Greater Klang Valley, was inaugurated in 2016 during the Barisan Nasional administration. The public was told that the estimated project cost was approximately RM9 billion.

However, when Pakatan Harapan took over Putrajaya in 2018, it was discovered that the initial RM9 billion only covered the construction costs. The sum did not include other crucial factors such as land acquisition, PDP and consultant fees, operational and overhead costs, as well as interest expenses. All these additional elements would significantly inflate the final cost to approximately RM32 billion.

The PH government then decided to shelve construction of the five stations and cancel one other station (Persiaran Hishammudin) as part of a cost-cutting drive to manage the overall project cost. According to then-Finance Minister Lim Guan Eng, this cost-saving measure would lower the price tag of LRT3 to RM16.63 billion. 

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