MRT Corp Justifies RM16.8b Penang LRT Budget

MRT Corp has dismissed claims of ballooning costs for Penang’s Mutiara Line LRT, saying its RM16.8 billion budget ceiling reflects today’s market conditions rather than uncontrolled escalation.

The project, first tabled in 2016 as the Bayan Lepas LRT, was priced at RM10 billion and only covered the stretch from Silicon Island to Komtar.

When the federal government took over in 2024, the route was extended to Penang Sentral, raising the cost to RM13 billion.

By December 2024, the ceiling was revised again to RM16.8 billion, with MRT Corp instructed to keep final costs below that figure. 
A conditional RM8.31 billion civil works contract awarded to SRS Consortium earlier this year was later reduced to RM7.93 billion after a value management review.

"The ceiling also factors in RM2 billion for land acquisition, with the balance going towards a second civil works package, the Sungai Nibong depot, system contracts and project management." the firm stated.

Rising land prices, inflation and additional works at Macallum and Silicon Island were cited as key drivers.
“The revised ceiling does not reflect uncontrolled cost escalation but market conditions over the last eight years,” it stressed.

The 29.5km line will include 21 stations, linking a reclaimed island near the airport to Komtar before crossing to Butterworth.

But MCA vice-president Tan Teik Cheng argued that the public deserves clearer answers. 
He questioned whether “value management” is masking poor planning or real upgrades, and why the original public–private partnership model was abandoned in favour of full federal funding.

“Malaysians have every right to know how public funds are being spent,” he said.