Is Palembang's LRT Construction Cost the Most Expensive in the World?

Prabowo Subianto, General Chairperson and also Chairman of the Supervisory Board of the Gerindra Party's Central Executive Board (DPP), stated in his speech at the Gerindra Party cadre's Halal Bihalal event in South Sumatra that the cost of the Light Rapid Transit (LRT) project in Palembang is the most expensive in the world. Prabowo also mentioned that the cost of the LRT project in the city reached Rp 12.5 trillion, equivalent to US$534 billion for a 24 km route, or approximately US$40 million/km. Meanwhile, the world's average construction cost index for LRT projects is only US$8 million/km, indicating a 500% cost inflation.

According to data from the Ministry of Transportation in its release titled "Comparison of Light Rail Transit (LRT) Investment Costs in Indonesia and Other Countries," the capital expenditure (Capex) for the Palembang LRT construction was US$37 million/km. This figure is for a 23.4 km route with 13 stations, 24 train units, and 100% elevated construction. For information, the initial cost of the Palembang LRT was indeed Rp 12.5 trillion, but it was later revised down to Rp 10.9 trillion.

For comparison, the Capex for the Kelana Jaya Line LRT construction reached US$63 million/km with a track length of 34.7 km, 25 stations, 120 train units, and 80% elevated construction. Meanwhile, the Capex for the Manila Line 1 LRT was US$70 million/km with a length of 23 km, 14 stations, and 100% elevated construction. Based on the graph below, the cost of the Palembang LRT is cheaper than the two LRT projects in Malaysia and the Philippines.