Lim Guan Eng, Tony Pua defend Pakatan’s LRT3 overhaul, say project saved taxpayers RM9.72b
KUALA LUMPUR, July 2 — Former finance minister Lim Guan Eng and former Damansara MP Tony Pua today defended Pakatan Harapan’s (PH) overhaul of the LRT3 project, saying it saved Malaysian taxpayers RM9.72 billion while rejecting suggestions the project had been halted under the coalition’s administration.
In a joint statement issued in response to remarks by the Sultan of Selangor, Sultan Sharafuddin Idris Shah, on the completion of the project, the pair said the Shah Alam LRT Line had continued without interruption after PH took office in 2018.
“The LRT3 project was never stopped, stalled or suspended during the PH administration between 2018 and 2020,” they said.
They added that the government at the time regarded the project as “critical and essential” to improving the daily lives of Klang Valley residents.
Lim and Pua said the previous Barisan Nasional administration approved RM9 billion for the project in 2015, but by March 2018, Prasarana had awarded work package contracts worth RM15.2 billion.
After accounting for land acquisition, consultancy fees, project delivery partner (PDP) fees and financing costs, they said Prasarana had sought a revised project budget of RM31.65 billion together with an additional RM22 billion government guarantee.
They said the PH administration continued construction while working with the appointed Project Delivery Partner, MRCB-George Kent, to reduce costs.
With the project only about 9 per cent complete in mid-2018, they said independent engineering consultants were appointed to review the scheme and recommend cost-rationalisation measures.
“The Cabinet approved the cost revision downwards by 47 per cent from RM31.65 billion to RM16.63 billion, a savings of RM15.02 billion,” they said.
According to the statement, the government reduced the number of train sets ordered, deferred the construction of five stations with initially low projected ridership — while making provisions for them to be built later — and extended the project’s completion target from 2020 to 2024 to avoid acceleration costs.
They said the five deferred stations have since been reinstated under a RM5.3 billion second-phase contract covering the stations, additional trains and other upgrades, bringing the project’s total cost to RM21.93 billion.
“That is still RM9.72 billion less than the original approved cost of RM31.65 billion,” they said.
Lim and Pua also defended the decision to abolish the Project Delivery Partner (PDP) model, arguing it created a perverse incentive for contractors because their fees were tied to the overall value of the project.
They said the model was replaced with a fixed-price contract, ensuring there would be no cost overruns.
According to the pair, the change helped keep the project’s final cost at RM21.93 billion — RM9.72 billion below the RM31.65 billion approved previously — while the lower debt burden is expected to save the government up to RM10 billion in interest costs over the next 25 to 30 years.
“The LRT3 project has now been successfully completed… enabling upfront project cost savings in excess of RM9.72 billion for Malaysian taxpayers,” they said.
The pair stressed that the savings did not come “at the expense of LRT passenger volume and functionality”, saying the rationalisation instead allowed the government to redirect funds towards welfare programmes and development spending.
They concluded by thanking Sultan Sharafuddin for highlighting the importance of the LRT3 project, saying the completed line would help ease congestion, shorten travel times and spur economic development in Selangor.
The joint statement came a day after Sultan Sharafuddin credited former prime minister Datuk Seri Najib Razak with approving the rail project following a request the Ruler made in 2015.
The Sultan also praised Prime Minister Datuk Seri Anwar Ibrahim for continuing the project and reinstating five stations that had been removed during an earlier cost-rationalisation exercise.
In his statement, Sultan Sharafuddin said the project was conceived to ease chronic traffic congestion between Klang, Shah Alam and Kuala Lumpur.
He also said the Finance Ministry under then finance minister Lim, together with his adviser Pua, had reduced the project’s scope by shrinking station sizes, reducing the number of train carriages and removing five planned stations as part of a cost-rationalisation exercise after the project was described as a “mega project”.
The Ruler said the line was later restored under Anwar’s administration with the reinstatement of the five stations, while cautioning against attempts by any party to claim sole credit for the project’s completion, saying it was the result of planning and cooperation across multiple administrations.
