Govt rules out hybrid financing for LPT3

KUALA LUMPUR: The government has not proposed a hybrid financing model for the East Coast Expressway Phase 3 (LPT3), despite adopting a similar approach for another highway project in Penang.

Deputy Works Minister Datuk Seri Dr Ahmad Maslan said the proposed 122km expressway would instead be developed through a public-private partnership (PPP), with the successful bidder bearing the full construction cost.

"Hybrid financing is something new. However, LPT3 must be considered alongside all the infrastructure projects the government has announced and implemented.

"So far, no hybrid financing has been proposed," he told the Dewan Rakyat.

He was responding to a supplementary question from Wan Hassan Mohd Ramli (PN-Dungun), who asked why the government had not considered a financing arrangement similar to that used for the Juru-Sungai Dua traffic-widening project in Penang.

Wan Hassan referred to the hybrid financing approach under the Public-Private Partnership Master Plan 2030 (Pikas 2030), involving 60 per cent government funding and 40 per cent financing from institutions such as PLUS Malaysia Bhd.

He questioned what had prevented the government from adopting the same model for LPT3.

Ahmad said the government had to consider its existing investments in major transport infrastructure serving the east coast before deciding on a financing arrangement.

He cited the Kota Baru-Kuala Krai Expressway, which costs RM2.3 billion and is fully funded by the government, with completion targeted for the end of 2027.

The RM7.7 billion Central Spine Road is also government-funded and toll-free, with completion expected by mid-2028.

Ahmad also highlighted the RM52.43 billion East Coast Rail Link (ECRL) project as part of the government's broader transport development programme.

He said preliminary studies conducted between 2020 and 2022 had estimated LPT3's construction cost at RM9.8 billion.

However, he expected the cost to exceed RM10 billion based on current conditions.

The government has decided to implement LPT3 through a competitive Request for Proposal (RFP) process under the PPP model.

The Works Ministry has submitted its Statement of Needs to the Public-Private Partnership Unit (Ukas) under the Prime Minister's Department.

Ahmad said Ukas was still preparing the RFP documents before the proposal could be brought to the cabinet for consideration.

The proposed LPT3 alignment will run from Kampung Gemuruh in Terengganu to Tunjong in Kelantan, completing the existing East Coast Expressway network.