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The government has agreed to continue with the Light Rail Transit Line 3 (LRT3) project at a lower cost of RM16.6 billion.

KUALA LUMPUR: The government has agreed to continue with the Light Rail Transit Line 3 (LRT3) project at a lower cost of RM16.6 billion.

This was disclosed by Malaysian Resources Corp Bhd and George Kent (Malaysia) Bhd in separate announcements to Bursa Malaysia today.

The revised cost was nearly half of the earlier cost of RM31.65 billion announced by the government in July.

MRCB and George Kent had formed a joint venture company named MRCB George Kent Sdn Bhd, which was originally the project delivery partner of LRT3.

The revised amount included land acquisition costs, interests during construction and other costs, the companies said.

“The implementation concept of the project will be remodelled from a project delivery partner regime to a fixed price contract regime,” they said.

The companies said a further announcement would be made to Bursa as and when there was a material development in relation to the project.

Finance Minister Lim Guan Eng had in July said that the cost of the LRT3 was reduced by 47 per cent from RM31.65 billion, thus saving Malaysians RM15.02 billion.

Prasarana Malaysia Bhd must “drastically” reduce the LRT3 project cost to ensure its viability, Lim said.

Prasarana previously secured a government guarantee for a RM10 billion bond facility to fund the project in 2015.

The company had requested for an additional RM22 billion in government guarantee to ensure funding for the construction and completion of the LRT3 project.

The 37km line aims to alleviate traffic congestion along one of the most important and densely populated economic development corridors in the Klang Valley, from Klang to Petaling Jaya.

It is expected to serve an area with a population of two-million people, with the capacity to transport 36,700 passengers per hour each way.

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