Who will bear the full cost of the proposed LPT3 development?

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The successful bidder will bear the full cost of the proposed LPT3 development.

The proposed East Coast Expressway 3 (LPT3) project will be implemented under a public-private partnership (PPP) model, specifically a Build-Operate-Transfer (BOT) concession. Under this arrangement, the private entity that successfully bids for the project is expected to cover all development expenses. The estimated development cost for the 122km highway, as of 2022, stands at RM9.8 billion.
Public-Private Partnership Model for LPT3

The LPT3 project is planned to be executed through a public-private partnership (PPP) framework. This approach signifies that a private company will be responsible for financing, constructing, and operating the expressway. The government's decision to adopt this model is primarily due to current financial constraints, necessitating the redirection of available federal allocations towards other critical national projects.
Build-Operate-Transfer Concession

Specifically, the LPT3 will be developed under a Build-Operate-Transfer (BOT) concession agreement. While a concessionaire has not yet been appointed, this model entails the private partner constructing the highway, operating it for a defined period to recoup their investment, and then transferring ownership back to the government. The highway is designed with two lanes in each direction and will feature five elevated interchanges, connecting Kampung Gemuruh in Terengganu to Tunjong in Kota Bharu.
Estimated Development Costs and Finalisation of Toll Rates

The projected development cost for the LPT3, based on 2022 estimates, is RM9.8 billion. However, the final toll rates have not yet been determined. A previous study from four years prior estimated a toll rate of approximately RM80, but this figure requires revision to reflect current economic conditions. The final toll structure will be influenced by various factors, including construction and financing expenses, operational and maintenance costs, projected traffic volumes, and the duration of the concession period.
Procurement Process and Timeline

The statement of needs for the LPT3 project has been submitted to the Public-Private Partnership Unit (UKAS) under the Prime Minister's Department. This submission is a crucial step to facilitate the preparation of Request For Proposal (RFP) documents. These documents will then be presented to the Cabinet for consideration and approval. UKAS is working towards finalising this procurement process within the established timeline.

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Who will bear the full cost of the proposed LPT3 development?

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