Final railway scheme for MRT3 approved, paving way for next phase
'This came about eight months after the three-month public inspection exercise ended on 2nd December 2024. Over 45,000 of written feedback were received, with 93.3% expressing support for the mega rail project,' said MBSB.
Among the main changes following the exercise was a -31.8% reduction in the number of lands lots required for acquisition, down from 1,012 to 690.
This is slightly behind the initial schedule, where the Final Railway Scheme was expected to be approved by quarter four of calendar year 2024 (4QCY24), nevertheless, it is still a positive as this marks a step forward for the mega rail project.
MRT Corp expects the land acquisition process to be completed by end-CY26, which will then pave way for construction to begin.
We also do not discount the possibility that the land acquisition process may take slightly longer than expected.
Notices for landowners to vacate the acquired lands should be issued starting 1QCY26, where they will be given up to six months to vacate.
Recall that MRT Corp had previously sought for four extensions for the tender validity of MRT3. No extensions were sought after the fourth extension ended in Mar-24, which would mean that the tenders have naturally lapsed.
We believe there would also be some changes to the original alignment of the project and the placement of stations, considering the reduction in plots of land for acquisition.
We expect a re-tender exercise to be called by mid-CY26, and contracts to be awarded towards the end of the land acquisition exercise, which will likely be by end-CY26 to mid-CY27.
The MRT3 Circle Line is a 51km orbital alignment that will serve the perimeter of Kuala Lumpur. It is designed for full integration with the existing MRT, LRT, KTM, and Monorail lines and will feature 10 interchange stations.
The alignment is expected to be 39km elevated and 12km underground, with 22 elevated stations, seven underground stations, and three future stations.
Back in 2023, the Government sought for a 10% reduction in the price tag for MRT3. When Prime Minister Datuk Seri Anwar Ibrahim retabled Budget 2023 in Feb-23, he expressed the Government's confident in cutting the MRT cost to under RM45b from RM50b previously.
Construction cost will make up the bulk of the amount, expected to be around RM31.0 bil. Land acquisition cost may come up to RM6.0 to RM7.0 bil, with the remainder for project management and financing costs.
The initial funding mechanism for MRT3 was planned to be a hybrid financing model where successful bidders of the contracts fund the initial two years of construction works worth at least 10% of the contract value and a minimum moratorium period of two years and will be reimbursed by the Government through deferred payments.
Following that, news reports have also surfaced that the funding model would revert to debt issuances by DanaInfra Nasional in order to reduce the Government's financing cost.
We are positive on the latest developments, which now provides more clarity that the MRT3 mega project is starting to take a step forward.
This strengthens our optimism for the Construction sector; hence we maintain our positive recommendation.
Construction of MRT3 may begin in CY27, which will keep contractors busy possibly up to 2033. This will be a timely continuation of projects following the expected completion of the Johor-Singapore Rapid Transit System (RTS) and the East Coast Rail Link (ECRL) by end-CY26. —July 18, 2025
Main image: Piston.my
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