KUALA LUMPUR, July 12 ― The 37km Light Rail Transit 3 (LRT3) project has been approved by Cabinet, Finance Minister Lim Guan Eng announced today.

He said Cabinet agreed to continue the project after its owner Prasarana Malaysia Bhd showed it was able to cut cost by nearly half and save the government RM15.02 billion.

"The final total cost of the LRT3 project is reduced by 47 per cent from RM31.65 billion to RM16.63 billion, saving Malaysians a total of RM15.02 billion.

"This cost will include all project costs, including but not limited to Work Package Contracts (WPC), land acquisition, project management, consultancy fees, operational and overhead costs, as well as interest during construction,” he said in a statement.

Lim said the massive RM15 billion savings in cost helps cut government debt and will also save taxpayers up to RM14 billion in loan financing interest the long run.

He said the government was able to cut cost by cancelling the building of a 2km LRT tunnel and underground station at Persiaran Hishamuddin in Shah Alam, Selangor and extending the timeline to complete from 2020 to 2024.

He added that further savings were made by halving the order of train carriages from 42 sets of six cars to 22 sets of three cars; the size of the LRT train depot; streamlining the size and design of the LRT stations; and shelving five stations where the projected ridership is low.

"These stations are Lien Hoe, Temasya, SIRIM, Bukit Raja and Bandar Botanic,” he disclosed.

Lim was chuffed with the savings, saying it showed the Pakatan Harapan government "is walking the talk in securing significant cost reductions for excessively-priced project caused by the poor governance of the previous government”, referring to the Barisan Nasional administration led by Datuk Seri Najib Razak.

The minister also said the LRT3 project will be restructured to a "fixed price contract” with the MRCB-George Kent joint venture, the current project Delivery Partner and Land Public Transportation Commission (SPAD).

"This will ensure that the price will be fixed and will not be subject to cost overruns. The details of this contract will be disclosed at a later stage,” he said.