The government will not provide additional funding for the LRT3 project unless the cost can be significantly reduced, Finance Minister Lim Guan Eng said today.
According to Lim, this follows Prasarana Malaysia Bhd's request for an additional RM22 billion in government guarantees for the project, on top of an initial RM10 billion bond facility which was also guaranteed by Putrajaya.
"The Finance Ministry will not support any additional funding required for the project unless the cost of the LRT3 project is significantly rationalised without compromising on the integrity of the rail network, as well as the safety and quality of service provided," he said in a statement.
Lim said the 37-km rail line was critical to alleviating traffic congestion, but the estimated cost had ballooned to over RM30 billion due to "mismanagement."
"The projected total cost of LRT3 of RM31.45 billion due to poor management by Prasarana Malaysia Bhd requires drastic cost reductions to make the LRT3 feasible and cost-effective.
"Certain news reports have indicated that the LRT3 cost can be reduced by RM6 billion.
"The Finance Ministry wishes to state that much more than RM6 billion must be reduced if the LRT3 project is to proceed," the statement read.
Lim noted that Prasarana made the request for the additional RM22 billion on March 30 this year to ensure completion of the project.
"The Finance Ministry has already requested Prasarana to drastically review the cost of the project to ensure its viability," he said.