The state agency said the RM245 million project was awarded to local rail firm Hartasuma Sdn Bhd under a 30-year public-private partnership using a design-finance-build-operate-transfer model.

Ownership will be handed over to the state once the concession ends, it said in a statement.

PHC said a public-private partnership was chosen to ease the financial burden on the state, with Hartasuma responsible for funding and operating the system.

Austrian ropeway specialist Doppelmayr Seilbahnen GmbH has been tapped to supply the cable car technology.

This follows reports of concerns over the project’s rising costs and current progress, with construction currently just 7% completed.

PHC said the RM245 million budget was based on estimates from a 2021 request-for-proposal, adding that this was a period marked by related economic uncertainty, inflation as well as higher labour and material costs due to Covid-19 and the ensuing lockdowns.

It said the project design was also adjusted to strengthen long-term viability.

PHC said Hartasuma remained committed to delivering an international-standard cable car system spanning 2.73km from the Penang Botanic Gardens to the top of Bukit Bendera.

The project includes three main stations, namely the Garden Station at the base, a mid-route Turn Station and the Hill Station at the summit, as well as a multi-storey car park, commercial plaza opposite the Botanic Gardens department and a dedicated bus parking space.

PHC said careful planning is under way to ensure the infrastructure integrates sustainably with the natural environment.

Once completed, the cable car is also expected to ease congestion on Penang Hill during peak seasons and around the Botanic Gardens area.