Penang commits to nominal land rates for LRT Mutiara Line to keep costs down

GEORGE TOWN, August 21 — All state-owned land required for the LRT Mutiara Line will be surrendered to MRT Corp at nominal rates to help keep the project’s costs low, Penang Chief Minister Chow Kon Yeow said today.

He said the state has agreed that all lands under its ownership, including those held by local councils and the Penang Development Corporation (PDC), will be provided at these rates.

“We are only claiming historical costs for lands that we might have acquired 30 years ago, and not the current market value,” Chow said at a press conference after launching the Icon Sunsuria and Island Hospital’s Cancer Centre.

He added that negotiations on land acquisitions are nearing completion.

Chow also addressed the recent increase in the LRT project’s budget ceiling, explaining that the new figure reflects a significant change in the project’s scope after it was taken over by the federal government.

“The costs cannot be compared to what was announced two years ago,” he said, noting that the alignment was expanded to include a cross-channel connection to Butterworth.

“The increase in costs is due to the addition of this scope, which involves a connection from Macallum to Penang Sentral, and also includes land acquisition costs.”

He reiterated statements by MRT Corp that the new budget of RM16.8 billion is a ceiling, and the final cost will only be known after all work packages are awarded.

“Only package one for civil and structural works from Silicon Island to Komtar has been awarded whereas the package two for Macallum to Butterworth has not been offered yet, the package for the systems works has not been offered yet,” he explained.

Chow added that the government wants to ensure that the project comes in under the ceiling cost.

Last month, MRT Corp chief executive officer Datuk Mohd Zarif Hashim had appealed to the state government to set land surrender rates at nominal values to help lower project costs, calling the Mutiara Line the “most reasonably priced LRT system in Malaysia.”

The LRT Mutiara line will span 29.5km with 21 stations, running from Silicon Island to Komtar on the island, and then across the channel to Penang Sentral in Butterworth. The project is expected to be completed in 2031. 

Three other lines, covering areas like Tanjung Bungah, Batu Ferringhi, and Air Itam, are also planned, with all four lines projected for full completion by 2050.