Why did LRT3 cost rise from RM9 billion to RM31.65 billion?

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LRT3 cost rose from RM9 billion to RM31.65 billion due to an expanded project scope driven by “needlessly expanding” requirements, according to claims tied to Malaysia’s Ministry of Finance.

The cost of the 37km LRT3 project rose from RM9 billion to RM31.65 billion, with the increase attributed to “needlessly expanding” the scope. A source in the Ministry of Finance cited in reporting linked the higher cost to changes such as benchmarking LRT station size to MRT counterparts, luxury finishing and iconic designs, tripling train capacity compared with feasibility studies, and building tunnels and underground stations at low-ridership locations. Finance Minister Lim Guan Eng later described the RM31.65 billion figure as the result of “poor management” by Prasarana.
The scope changes described as inflating the project
The reported explanation focuses on the project being expanded beyond what had initially been announced. Specific examples cited include benchmarking LRT station sizes to MRT counterparts, adding luxury finishing and “iconic designs,” and setting train capacity at triple the level used in feasibility studies. It also points to constructing tunnels and underground stations at locations assessed as having low ridership.
Construction costs were already higher before other costs were added
The reporting states that construction costs alone rose from the announced RM9 billion to RM15.8 billion before adding other costs. This means that the increase was not limited to later expenses, but was already reflected at the construction stage. The jump from RM9 billion to RM15.8 billion was presented as part of the overall path to the RM31.65 billion estimate.
Finance Minister Lim Guan Eng linked the rise to management issues
Finance Minister Lim Guan Eng said the RM31.65 billion estimate was due to “poor management” by Prasarana. He also said the cost would need to be reduced drastically by more than RM6 billion for the project to be feasible and for the government to allow it to proceed. This framing tied the cost escalation directly to how the project was managed rather than to a single cost item.
Later approval followed a cut to RM16.63 billion
Putrajaya later approved the 37km LRT3 project after Prasarana showed it could cut cost by nearly half to RM16.63 billion. The reported figure also states this would save the government RM15.02 billion. The approval came two days after the minister’s remarks on the RM31.65 billion cost figure.

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Why did LRT3 cost rise from RM9 billion to RM31.65 billion?

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