Half of the cost, going ahead and delayed too; LRT 3

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Many friends are now telling me that we should not be buying a property solely because it’s near a LRT / MRT. The reason is because the government is doing lots of cost-cutting and deferment so that the country’s finances can recover.  Seriously, I believe this should always be the case right? If there’s just ONE reason to buy the property and the REASON is LRT / MRT, there is a HUGE risk with our decision lah. Anyway, our Light Rail Transit (LRT) Line 3 will be continuing as the government has agreed with the lower cost of RM16.6 billion. This revised cost is nearly HALF of the cost of RM31.65billion announced by the government in July.  Full article about this in NST here. 

The LRT Line 3 was a project under MRCB and George Kent which had formed a joint venture company named MRCB George Kent Sdn Bhd earlier. They were the project delivery partner (PDP) of LRT3. Now they are no longer the PDP and the project is now based on a fixed price contract regime. In July, Finance Minister Lim Guan Eng had said that the cost of the LRT3 was reduced by 47 per cent from RM31.65 billion, thus saving Malaysians RM15.02 billion. LRT Line 3 is a 37km line which aims to alleviate traffic congestion along one of the most important and densely populated economic development corridors in the Klang Valley, from Klang to Petaling Jaya. It is expected to serve an area with a population of two-million people, with the capacity to transport 36,700 passengers per hour each way. Full article in NST here. 

I do wonder what’s the major difference in this case. PDP was given the task of completing the project on time, failing which they will be fined but if it’s ahead of schedule, they will get some rewards. Anyway, the continuation of LRT Line 3 is a good news to those who were ‘sweating’ with the potential that the stations nearby their properties being cut. Just note that the timeline is delayed by 4 years to 2024. The order of 42 sets of six-car trains are now reduced to 22 sets of three-car trains. There were also streamlining of the size and design of the LRT stations based on Kelana Jaya LRT line standards. Five stations were shelved until it is deemed necessary to be built. They include Lien Hoe, Temasya, SIRIM, Bukit Raja and Bandar Botanic. A 2km tunnel for the LRT together with an underground station at Persiaran Hishamuddin, Shah Alam was also cancelled. Happy following.

written on 18th Oct 2018

Next suggested article:  Buy on fundamental, not speculatively. Buy based on why. WHY?

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