The Finance Minister Lim Guan Eng announced that Prasarana Malaysia has previously secured a government guarantee for a RM10 billion bond facility to fund the LRT3 project in 2015. However, on 30 March 2018, Prasarana has requested for an additional RM22 billion in government guarantee to ensure funding for the construction and completion of the LRT3 project.
The Finance Minister said the final total cost of the LRT3 project is reduced by 47% from RM31.65 billion to RM16.63 bilion, saving Malaysians a total of RM15.02 billion. This 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.
Yesterday, the former Finance and Prime Minister Dato’ Seri Najib Razak however, argued that the project does not cost RM31.65 billion in his response to Malaysiakini.
“No approval was given and their request was not accepted. Every time an agency requests for budget does not mean that the government will accept. In fact, we reject more requests than we accept,” he argued.
“No such approval was given. Period. No contracts worth RM15 billion or RM31 billion were signed. In fact, the letter seeking for the additional RM22 billion never even reached me and I was the finance minister then,” he said.
You can look back at previous media reports. In 2015, Prasanna themselves gave a public assurance that they will work within the RM9 billion budget.
Dato’ Seri Najib, that’s where you failed miserably as a Finance Minister.
Firstly, surely you cannot be unaware that the so-called RM9 billion budget for LRT3 you ‘approved’ was merely for the construction cost of the LRT? It did not include among other things, land acquisition, PDP fees, other consultant fees, operational and overhead costs, as well as interest during construction.
Secondly, by March 2018, Prasarana has already awarded RM15.2 billion worth of WPCs for the construction of the LRT3 project. Each of these WPCs were approved by the Ministry of Finance, of where you were not only the Minister, you personally chaired the tender committee meetings. Hence you were obviously terrible with your job since you now claim that “no contracts worth RM15 billion… were signed”.
As highlighted, the above hasn’t yet included all the other cost of the project such as land acquisition, PDP fees, other consultant fees, operational and overhead costs, as well as interest during construction.
Thirdly, the fact that you had “not approved” Prasarana’s request yet for an additional RM22 billion allocation, does not mean that the overall cost did not run out of control. Lim Guan Eng did not say that you had approved the request for an additional RM22 billion in government guarantees. All the new Finance Minister said was the total cost of the project according to Prasarana themselves has increased to RM31.65 billion. The fact that Prasarana had in 2015 given any assurance, if any at all, that the cost was RM9 billion, is irrelevant.
Dato’ Seri Najib Razak should ask himself how he was so incompetent, ignorant, clueless and irresponsible as to be completely not aware of how the cost of the LRT3 project has gone out of control.
Unlike the typical project half-baked announcements from the Najib administration, the Harapan administration has no intention to hide the true cost of the project. In this case, the overall TOTAL cost of the project, has been renegotiated down to RM16.63 billion. This cost includes the WPCs, land acquisition, project management, consultancy fees, operational and overhead costs, as well as interest during construction.