Penang to scale down PSI reclamation project by 49% on PM’s request, says CM

Published by TheStar • 11/5/2023

GEORGE TOWN (May 11): The Penang government has agreed to scale down the Penang South Island (PSI) reclamation project by 49% by not proceeding with the construction of ‘Island B’ and ‘Island C’.

Chief Minister Chow Kon Yeow said this was despite the Environmental Impact Assessment Report (EIA) for the PSI project being approved by the Department of the Environment (DOE), through a letter dated April 11, 2023, covering three islands and involving a total area of 4,500 acres.

He said the decision was made in response to Prime Minister Datuk Seri Anwar Ibrahim’s request for the state government to scale down the project.

“Silicon Island (Island A), covering 2,300 acres, will be implemented in two phases within 10 to 15 years for reclamation work, while reclamation work for Island B, covering 1,400 acres and Island C (800 acres) will not proceed,” he told a press conference here on Thursday (May 11).

PSI involves the development of three artificial islands, with an area of 1,800ha, in the waters off Permatang Damar Laut, near Bayan Lepas.

However, the project received objections from the fishing community and environmental non-governmental organisations in the state because it was alleged that the project would damage the marine ecosystem in the area.

Chow said it has also been decided that Silicon Island will remain as a light rail transit (LRT) depot site, involving 60 acres, while the Green Tech Park (GTP) will be maintained as an economic catalyst and the Heart of the Island (HOTI) as a new tourism product for the state.

Chow said reclamation for the first phase of Silicon Island involving 1,300 acres, including the LRT depot site, which is expected to take seven to 10 years to complete, would not have any impact on the lives of fishermen.

The second phase will cover an area of 1,000 acres, he said, adding that reclamation for Silicon Island, including the ‘topside’ part, would take 20 years.

He said the scaling down of the project would directly affect only 115 fishermen from Permatang Tepi Laut, compared to 496 people who would be affected by the reclamation for all three islands.

“With this latest development, the Social Impact Management Plan (SIMP) scheme for the affected fishermen will be discussed in detail in the fishermen task force committee meeting to be chaired by Deputy Chief Minister I Datuk Ahmad Zakiyuddin Abdul Rahman,” he said.

Chow said changes to the project will not result in any loss to the state government or the Project Delivery Partner (PDP) SRS Consortium because both parties had only signed an agreement for Island A.

According to SRS Consortium project director Szeto Wai Loong, the cost of reclamation and basic facilities of Silicon Island is expected to be about RM8.5 billion, whereby the company will create land parcels and auction them to the highest bidder.

The successful bidder will develop the land, he said.

Meanhwhile, Chow said the state government and SRS Consortium will not be involved in the development of the land site.

On May 6, Anwar announced that the federal government would allocate additional allocation to help the Penang government expedite the proposed George Town-Bayan Lepas light rail transit (LRT) project.

The prime minister also asked the Penang government to scale down the project.