Penang LRT likely to become ‘financial albatross’!

It costs 10 times more than viable alternatives

An unsightly large overhead light rail station in Kuala Lumpur

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By Lim Mah Hui

The federal government and the Penang state government must answer to taxpayers why they choose to fund and build an elevated “light rail transit” (LRT) – which will be a financial, technical and environmental albatross – when better, cheaper and faster alternative public transport modes are available.

 1. Cost comparison – Building an LRT system is significantly more expensive than alternatives like autonomous rail rapid transit (ART) or bus rapid transit (BRT). Construction costs are about 10 times higher for LRT (RM360m per km) compared to ART or BRT (RM38m per km)

2. Construction time and impact – An LRT system takes much longer to construct and causes major traffic disruption during its construction phase, compared to the more swiftly implemented ART or BRT systems

3. Operating and maintenance costs – The operating and maintenance costs for LRT are about three times higher per km than those for ART or BRT systems.

4. Flexibility and coverage – ART and BRT offer greater flexibility and can cover a wider area, allowing for the expansion of more routes using the savings from their lower implementation costs. These savings can address the critical first and last-mile connectivity problem.

5. Capacity suitability – The carrying capacity of ART or BRT is more than adequate for Penang’s population, with ART vehicles carrying up to 300 passengers compared to 500 for LRT, suggesting that the larger capacity of LRT may not be necessary.

6. Ridership projections and financial feasibility – Comparative data from existing LRT lines in other regions, such as the Kelana Jaya LRT and the KL monorail, show that not one line has achieved its projected ridership after 25 years. This indicates potential overestimations in ridership projections and subsequent revenue losses for the Penang LRT. We should avoid the costly mistakes of LRT in Kuala Lumpur and the Klang Valley

READ MORE:  Why is the Penang government obsessed with LRT, ex-state transport engineer asks

https://myrapid.com.my/bus-train/ridership

7. Projected financial outcomes – Detailed projections for the Penang LRT indicate potential annual deficits due to high operating costs and lower-than-expected ridership, with substantial losses in ticket revenue predicted based on current fare structures and daily ridership estimates. Estimated annual losses can reach half a billion ringgit when interest payments are included

*Based on average ticket per ride of RM4

8. Stakeholder analysis – The financial analysis shows significant potential for financial gain for major contractors involved in the LRT project, raising questions about the alignment of project costs and who benefits most from it. Reports from the New Straits Time and the Star estimate Gamuda stands to reap between RM5bn-6bn in revenue from it.

Dr Lim Mah Hui is an economist, former international banker and former Penang Island city councillor

The views expressed in Aliran's media statements and the NGO statements we have endorsed reflect Aliran's official stand. Views and opinions expressed in other pieces published here do not necessarily reflect Aliran's official position.
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Orang Ulu
Orang Ulu
12 May 2024 8.08am

The greater financial albatross for Malaysians is the unelected PM who spend tax payers money endlessly gallivanting the globe instead of solving Malaysian domestic problems.

Paul Lim
Paul Lim
12 May 2024 12.35am

Thought it was off the table. My option is for ART. Climate, CO2 …. has to be taken into consideration. I presume human pride for Penang as a modern city is in the minds of the state-federal governments. Who benefits in the end?