Penang LRT: A Dream Project or a Looming Financial Burden?

The long-awaited Penang Light Rail Transit (LRT) project is once again in the spotlight, and as with any major infrastructure initiative in Malaysia, it comes with a fair share of questions, concerns, and potential pitfalls. The transport minister may have resolved his frustrations with Malaysia Airports Holdings Berhad (MAHB), but another challenge awaits—one that could turn into a significant headache if not handled with transparency, accountability, and strategic foresight.

A Shift in Plans and Rising Costs

Back in 2018, the transport minister himself questioned whether an overhead LRT was the best option for Penang’s public transport. Fast forward to March 2024, and the government is now pushing forward with the LRT, aiming to begin construction by the fourth quarter. Initially estimated at RM10 billion, the project’s cost has now ballooned to RM13 billion after Prime Minister Anwar Ibrahim instructed it to connect to Penang Sentral. This expansion, along with other large-scale infrastructure projects such as the Penang International Airport expansion and the Juru-Sungai Dua Elevated Highway, is seen as a crucial factor in attracting investors to the state.

However, the LRT project itself is divided into three major components:

1. Segment 1 (Silicon Island to Komtar) – RM8.3 billion, “offered” to SRS Consortium Sdn Bhd (SRS).

2. Segment 2 (Komtar to Penang Sentral).

3. Segment 3 (turnkey contract for system and carriage works).

The decision to award Segment 1 to SRS raises concerns over governance and procurement transparency, as this was done without an open tender. Moreover, the RM13 billion does not account for land acquisition costs, further inflating the overall expenditure. The planned LRT depot at the Pesta site in Sungai Nibong has also sparked controversy, adding another layer of uncertainty to the project’s feasibility.

Ignoring a More Holistic Approach?

Penang’s public transport woes have been long-standing, but is LRT really the best solution? The original Halcrow study, a UK-based proposal officially adopted in 2013, presented a more comprehensive approach to public transportation in the state. It emphasized:

• Optimizing existing roads rather than over-reliance on new mega-infrastructure.

• Upgrading bus services to Bus Rapid Transit (BRT) or tram networks, which are cheaper and easier to maintain.

• Institutional reforms to improve governance and efficiency in transportation planning.

• Policies to reduce private vehicle dependency and promote sustainable urban mobility.

• Enhancing ferry and water transport services, making better use of Penang’s geographical strengths.

Yet, in 2015, SRS presented a vastly different RM46 billion Penang Transport Master Plan (PTMP), which focused on high-cost infrastructure and highways—departing significantly from Halcrow’s more balanced and sustainable approach. The new PTMP also lacked peer reviews and feasibility studies to determine if these mega-projects were the most cost-effective solutions.

The Question of Financial Sustainability

LRT systems are notoriously expensive to build, operate, and maintain, especially compared to BRT or tram systems. The flawed projections for ridership and revenue raise red flags, especially given past experiences with Klang Valley’s public transport projects. The federal government has had to bail out MRT, LRT, and ERL operators with billions of ringgit due to unrealistic financial assumptions.

Further, There Is No Timeframe Commitment

Even more concerning is the absence of a clear and well-defined timeframe for the completion of the overall Penang Transport Master Plan (PTMP). While the Penang LRT project has been given a tentative completion date of 2031, the broader PTMP under the SRS plan lacks a concrete schedule, leaving the public and stakeholders in the dark about its long-term execution. This raises serious questions about planning efficiency, project accountability, and financial sustainability.

Moreover, there is limited access to critical reports such as the Environmental Impact Assessment (EIA) and Social Impact Assessment (SIA), which are essential for evaluating the project’s long-term viability and its impact on the environment and local communities. Without these documents being made publicly available, it is difficult to assess whether the necessary due diligence has been conducted to mitigate risks, ensure compliance with regulatory standards, and uphold public interest.

The lack of transparency surrounding these reports further compounds concerns about governance, as it suggests that key decisions are being made without adequate public scrutiny or engagement. Given the significant financial commitment and potential environmental consequences, it is imperative that the Penang state government and relevant authorities disclose comprehensive project details, including a detailed timeline for the entire PTMP, so that the public can hold decision-makers accountable.

Governance and Conflict of Interest

Former Penang state transport engineer Lim Thean Heng has voiced serious concerns over governance and accountability, issues that have persisted since 2015. His remark that the LRT is a “19th-century solution to a 21st-century problem” is not without merit. The state government has promised to uphold Competency, Accountability, and Transparency (CAT), yet the direct award of projects and involvement of developers in transport planning suggest otherwise.

One troubling question is conflict of interest—how can consultants who initially proposed the project later become the contractors? This undermines the integrity of the procurement process and raises suspicions about vested interests benefiting from the RM13 billion allocation.

Furthermore, recent reports from The EDGE Malaysia indicate that major construction firms are vying for RM9 billion worth of contracts despite RM8.3 billion already being awarded. This discrepancy demands further scrutiny.

A Broader Perspective on Penang’s Growth

Penang is a small state—1,049 sq km with 1.77 million people—yet it has a staggering 2.7 million vehicles. Compare this to Singapore (734 sq km, 6 million population) with just 1 million vehicles. Clearly, Penang’s mobility crisis is not just about infrastructure but also urban planning and policy.

Instead of sinking billions into an LRT that may not deliver the expected benefits, should Penang consider:

• Expanding economic and industrial growth to the mainland to reduce urban congestion?

• Limiting high-end waterfront developments, luxury malls, and condos that drive up land costs without solving mobility issues?

• Attracting global industrial players that enhance competitiveness while ensuring sustainable development?

With Malaysia’s national debt exceeding RM1.5 trillion, we cannot afford extravagant infrastructure projects that do not deliver clear economic and social returns.

Anwar’s Commitment to Good Governance

Prime Minister Anwar Ibrahim has consistently emphasized good governance and anti-corruption measures. If he is serious about cleaning up systemic inefficiencies, this project must be scrutinized. There needs to be fiscal prudence, a transparent cost-benefit analysis, and proper comparisons with alternative solutions.

Most importantly, the project must prioritize public interest over developer-driven agendas. Penang needs a sustainable mobility plan, not another mega-project that could burden future generations with debt.

Final Thoughts

The Penang LRT should not be another white elephant. It must be a solution, not just a legacy project. Before committing billions, we must ask:

• Is this truly the best solution for Penang’s transportation needs?

• Are there cheaper, more sustainable alternatives?

• Is there full transparency and accountability in awarding contracts?

• Will it genuinely improve the quality of life or just enrich certain parties?

This is not just about a transport project—it is about responsible governance, financial prudence, and the future of Penang. If we truly want transformative economic growth, we need to make decisions based on data, sustainability, and the real needs of the people—not just on what developers want.

What say you?