THE cost for the proposed Mutiara Light Rail Transit (LRT) line, which is now estimated at RM16.8 billion, was not intentionally increased as the original costs was decided over two years ago, said Chief Minister Chow Kon Yeow.
He assured that there was no miscalculation on the part of the project delivery partner - MRT Corporation Bhd nor the public authorities.
He clarified that the project cost rose due to inflation and the extension of the route to Butterworth.
The MCA earlier raised concerned over the escalation in the cost of the Mutiara LRT, citing that in just a year, the cost surged from RM10 billion as announced in Budget 2024 to an astonishing RM16.8 billion - an increase of RM6.8 billion in under 12 months.
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’s money.
"The public deserve an honest, comprehensive explanation from the government for this increase," said Tan, who is also the Penang MCA chairman.
Chow also explained that there was a budget ceiling costs of RM16.8 billion - a base for the costing.
He also said that state land acquired for the project was not overly expensive, as claimed by certain quarters.
He pointed out that there was one stretch which was pricey namely because the state was forced to earlier acquire it from private landowners.
The other state land costs were nominal, considering the historical valuation of the land.
Chow said this after launching the Icon Oncology care centre at the Island Hospital here.
Later, MRT Corp in a statement, said that the budget ceiling of RM16.8 billion also includes the land acquisition costs, which is now expected to costs RM2 billion.
The remaining RM6.8 billion is for the civil main contract package 2, light stabling depot at Sungai Nibong and the systems turnkey contract - all of which are yet to be awarded, as well as project management and consultancy costs. - August 21, 2025.
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