What led to the LRT3 project cost ballooning to RM31 billion?

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LRT3 Project Cost Escalation Factors

The final projected cost of the Light Rail Transit (LRT3) project has significantly increased, with the Finance Minister stating it could exceed RM31 billion, a substantial rise from the initial RM9 billion estimate. This escalation has been attributed to factors including the awarding of works packages exceeding the original budget and alterations to the project's parameters. Despite former prime minister Datuk Seri Najib Razak's denial of approving additional funding requests, evidence suggests that over RM15 billion in works packages were already awarded, indicating a cost overrun beyond the initial RM9 billion.
Awarding of Works Packages Exceeded Initial Budget

The initial budget for the LRT3 project was RM9 billion. However, by the time the cost escalation became a public issue, over RM15 billion in works packages had already been awarded. This indicates that the project's expenditure on contracted works alone had already surpassed the original financial allocation, contributing significantly to the overall cost increase.
Alteration of Project Parameters

Following the disclosure of the escalating costs, the Finance Ministry undertook a review and altered the existing parameters of the LRT3 project. These adjustments have led to a revised expected cost of RM16.63 billion for the 37km line. While the specific details of these parameter alterations are not elaborated upon, they represent a strategic intervention aimed at recalibrating the project's scope and financial projections.
Disputed Approvals and Funding Requests

Allegations of abuse emerged after Finance Minister Lim Guan Eng announced the potential RM31 billion final cost. Former prime minister Datuk Seri Najib Razak, who was finance minister when the project began, denied approving Prasarana's request for an additional RM22 billion in funding support. However, this denial was countered by Lim and his special officer, Tony Pua, who highlighted the substantial value of awarded works packages as evidence of costs already exceeding the initial budget.

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What led to the LRT3 project cost ballooning to RM31 billion?

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