KUALA LUMPUR (July 10): The projected total cost of the Light Rail Transit Line 3 (LRT3) project has spiralled to a whopping RM31.45 billion, Finance Minister Lim Guan Eng said today, blaming it on poor management by Prasarana Malaysia Bhd.

The latest cost estimate is significantly higher than the RM15 billion cited in recent news reports. The original estimate when the project was launched in 2015 was RM9 billion.

Lim, in a statement, called for a drastic cost reduction to make the project feasible and cost-effective.

He added that the finance ministry will not support any additional funding required for the project unless the cost is "significantly rationalised without compromising on the integrity of the rail network as well as the safety and the quality of service provided".

"Certain news reports have indicated that the LRT3 cost can be reduced by RM6 billion. The ministry wishes to state that much more than RM6 billion must be reduced if the LRT3 project is to proceed," said Lim.

The minister noted that Prasarana had secured a government guarantee for a RM10 billion bond facility to fund the project in 2015.

However, on March 30 this year, the state-owned transportation company requested for an additional RM22 billion in government guarantee to ensure funding for the construction and completion of the project, said Lim.

"The Ministry of Finance has already requested Prasarana to drastically review the cost of the project to ensure its viability," he added.

Lim said the LRT3 is a critical project aimed at alleviating the issue of traffic congestion along one of the most important and densely populated economic development corridor in the Klang Valley.

The 37km alignment connects Klang to Bandar Utama in Petaling Jaya.

Lim said LRT3 was expected to serve a two million population with the capacity to transport 36,700 passengers per hour each way.

A news report on Monday said Prasarana could take over the construction of the project from the project delivery partner — a 50:50 joint venture between Malaysian Resources Corp Bhd and George Kent (Malaysia) Bhd — in view of the massive cost overruns.