‘Wasteful’ Penang LRT to cost govt RM600mil a year, says economist

Economist Lim Mah Hui and former Penang government transport engineer Lim Thean Heng gave a press conference at Aliran’s office in Jelutong.

GEORGE TOWN: An economist has described the upcoming Penang Light Rail Transit (LRT) project as “wasteful”, estimating that it will cost RM600 million annually due to the anticipated low ridership and high maintenance cost.

Former international banker Lim Mah Hui said estimated annual losses could reach over half a billion ringgit when interest payments are included.

He predicted that the deficit would range from RM32 million to RM180 million yearly, depending on actual ridership, which varies in the projections from 5 million to 42 million passengers per year.

Lim said that with a capital expenditure of RM10.5 billion and annual interest payments of RM420 million based on the typical government interest rate of 4% per annum, it would be a heavy financial undertaking for Penang and the federal government.

“When you’re projecting a deficit even in the most optimistic scenarios, it begs the question if we’re investing in the right kind of infrastructure,” he said at a press conference hosted by Aliran here today.

“Will the state or the federal government forsake its RM500 million revenue to support this deficit? I would like to have an open dialogue with the chief minister and (for) us to solve this problem before they carry out this expensive, wasteful expenditure,” he said.

In 2019, chief minister Chow Kon Yeow told the state assembly the LRT project stands to suffer losses of RM11 million in its first year, and would only generate a surplus in its fifth year of operations.

Former state transport engineer Lim Thean Heng’s projections for the Penang LRT project.

ART or BRT cheaper, easier to implement

Lim said alternatives such as Bus Rapid Transit (BRT) or Autonomous Rapid Transit (ART) systems could achieve similar benefits at a fraction of the cost and with greater flexibility.

He said construction cost was about 10 times higher for LRT, at RM360 million per km, compared to ART or BRT, which was about RM38 million per km based on estimates for the Kuching ART project.

He said comparative data from existing LRT lines such as the Kelana Jaya LRT and the KL monorail show that not one line has achieved its projected ridership.

After 27 years, he said, the Kelana Jaya line only hit 60% of the projected ridership of 360,000 persons per month as of February, citing data published by RapidKL.

Lim described projections for Penang LRT’s ridership, at 42 million ridership per year, as unrealistic. With a present population of 1.8 million people, this was impossible to achieve, he said.

“The government should avoid the costly mistakes of LRT in the Klang Valley. It is against the Madani government’s mantra to be wasteful,” he said.

Former state transport engineer Lim Thean Heng claimed the LRT project, along with components in the Penang Transport Master Plan, never had the opportunity to be peer reviewed.

He said a team of Universiti Sains Malaysia researchers were appointed to review it in 2016, but was purportedly denied from viewing key blueprints.

The 29km Penang LRT line is expected to be completed by 2030, with work expected to start as early as September by SRS Consortium, a Gamuda Bhd company that will undertake the first segment of the rail line from Komtar to Silicon Island.

The project is expected to have 20 stations, including two interchanges at Komtar and Penang Sentral.

FMT has reached out to the state government for comment.