Malaysia’s federal government will finance the Penang LRT project directly through the development budget instead of adopting a public-private partnership (PPP) model. The shift was possible as other major transport projects are nearing completion, freeing up allocation space in the yearly development expenditure. He emphasized that direct funding avoids long-term liabilities and debt burdens, as PPPs still require eventual government payments.
The Penang LRT, also known as the Mutiara Line, has been given a cost ceiling of MYR16–17 billion, with the current estimate around MYR16.8 billion. Loke clarified that this figure is not a bidding target and the government intends to reduce costs through competitive tenders. Package one, awarded to SRS Consortium, was reduced from MYR8.3 billion to MYR7.98 billion after value management reviews. Package two (systems and rolling stock) and package three (cross-straits rail bridge linking Macallum to Butterworth) will be awarded through open tenders.
The first phase of the LRT spans 24 km from Komtar in George Town to Island A of the Penang South Island project, featuring 19 stations. The full line will extend 29.5 km with 21 stations, connecting the reclaimed island near the airport to Komtar and across to Butterworth. MRT Corp earlier estimated costs at MYR13 billion, with completion targeted by 2031.