Initially, the proceeds from the PSI project were expected to help pay for the LRT under the Penang Transport Master Plan (PTMP), but that will no longer be required after the federal government’s intervention.

Transport consultant Rosli Azad Khan told FMT “there is no justification for PSI to continue” if it is no longer needed to fund the rail project.

“It will not be fair to the fishing community that their livelihoods are taken away while the government is now paying for LRT infrastructure,” he said.

Transport minister Loke Siew Fook had told FMT that the project would be “fully undertaken” by Putrajaya. It was previously reported that the Penang LRT project would cost an estimated RM10 billion.

Rosli said the best financing method for the LRT project is straightforward: government funding through open tender.

“Public-private partnerships (PPP) will be too expensive,” he said.

Meanwhile, former Land Public Transport Commission (SPAD) official Wan Agyl Wan Hassan praised the government’s decision.

“Public transport projects are key to giving people more ways to get around and stay connected.

“For these kinds of projects to be successful, federal and state officials must work together well,” he said.

However, he praised the stability of PPP as a financing model as it “balances risk and reward for both the public and private sectors.”

Public transport projects are typically undertaken by Putrajaya as they fall under its purview. However, the lack of funding from previous federal governments forced Penang to resort to reclaiming land to sell to developers.