Wrong. The federal government canceled the Penang Monorail proposal. They didn't cancel it because they lost the state. BN isn't that petty you see. The federal government back then wanted to focus on the KTM project. 

Ok. 
The timing? Well, it is indeed political, I admit. Let's be honest, wouldn't both sides want to look impressive? If the project had gone through, Malaysians would thank the Penang state government instead of the federal government. That would allow the opposition to benefit from "false publicity".

Anyway, the government shelved the project and revived the KTM project, as I remembered Badawi's exact words, "To focus on people's need first". Of course, Badawi was never really a good leader for the country.