The cost overrun, if any, in implementing the Greater Kuala Lumpur project should be capped at below ten per cent, says Asian Strategy and Leadership Institute's (Asli) chief executive officer Michael OK Yeoh.

He said it was important for the government to manage and plan effectively in order to minimise the cost overrun.

"Sometimes, cost overrun are from external factors like insurance and building materials that are beyond the control of the project contractors.

"Another way to help minimise some cost overrun would be speedy implementation," he told reporters at a conference in Kuala Lumpur today on 'Greater KL: Smart city of the future'.

The one-day conference was to discuss the potential and challenges of developing Greater KL and its transformation into an iconic smart city in the future.

The event was jointly organised by Asli and IBM Malaysia Sdn Bhd to promote the Economic Transformation Programme that envisages the transformation of Greater KL into one of the top 20 most liveable cities by 2020.

Meanwhile, commenting on the economic outlook for this year, Yeoh said it was expected to perform quite well, based on a good growth of 7.2 per cent last year.

"This year, I am looking close to six per cent growth, where we have seen a recovery in the export sector as well as strong commodities prices (rubber and palm oil). That should be very good for the economy."

However, he said, the government would still need to worry about inflation with the increase in food and global oil prices.

The current oil price will have an impact on many countries, he said.

"But we are perhaps fortunate as we are also an oil exporter. But if the global oil price goes above US$100, then I think we will begin to feel the effect."

Yeoh also said that if the global oil price goes above the US$100 per barrel level, the government might have to look again at the cost of subsidy.

This rise in oil price could also be temporary as the crisis in the Middle East could be resolved and oil price might drop back again, he said, adding that he expected the crisis to last about three months.

- Bernama