Loke says LRT3 contractor may face over RM475m penalties, vows accountability over delays

KUALA LUMPUR (March 4): Light Rail Transit 3 (LRT3)’s main contractor could face penalties of more than RM475 million due to project delays, Transport Minister Anthony Loke (pictured) said.

The project, also known as the Shah Alam Line, has been facing delays since the completion date was extended on July 10, 2025, Loke told the Dewan Rakyat during Tuesday’s oral question-and-answer session. LRT3 has yet to commence operations, and the new deadline is by June this year.

The daily liquidated ascertained damages imposed on the main contractor amount to RM2,729,280, or 0.024% of the total contract value, for each day of delay, he added.

Loke was responding to Syahredzan Johan (PH-Bangi), who asked about the total compensation payable by the LRT3 main contractor, Setia Utama LRT3 Sdn Bhd, as of Dec 31, 2025.

The LRT3 line, stretching from Bandar Utama in Petaling Jaya to Johan Setia in Klang, has been in the spotlight after several postponed operation dates blamed on multiple technical problems during the trial run.

Loke attributed the project setbacks to failure of signalling system supplier Siemens to deliver software according to schedule. Additional factors included delays in critical testing of other system packages, as well as the completion of the System Integration Test.

He stressed that the contractors will be held accountable for the delays and that various claims may be imposed once projects are completed.

“We hope this also serves as a lesson to ensure future projects are planned and executed according to contract terms,” Loke added.

Maintenance cost to be embedded in future

Meanwhile, Loke said the government plans to include long-term service agreements in the total cost of future major public transport projects, a best practice used by foreign operators, where maintenance costs are bundled into contracts.

“Going forward, we will negotiate with original equipment manufacturers to supply trains and provide comprehensive long-term maintenance, ensuring a more robust upkeep regime,” he said.

Acknowledging that public transport operators in Malaysia cannot operate independently financially, Loke stressed that maintenance budgets will not be cut, as compromising upkeep could lead to greater disruption for commuters.

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