Exco man: Delivery partner to bear all financing for massive PSR project

Published by The Star• 31/03/2021

Chow, executive councillors and assemblymen posing during the state engagement session at a hotel.

THE RM9.6bil Pan Island Link (PIL 1) highway project will be constructed in phases starting with a 2.4km stretch in Bayan Baru.

Infrastructure and transport committee chairman Zairil Khir Johari said the first phase of the PIL 1 would connect Jalan Tun Dr Awang to Lebuhraya Tun Dr Lim Chong Eu at the Free Industrial Zone (FIZ) 4.

“When this part of the alignment is built, it will reduce traffic congestion in Jalan Tengah, Jalan Baru and around the FIZ area.

“The project received its environmental impact assessment (EIA) approval from the Depart-ment of Environment on April 10,2019.

“The EIA approval was further extended for another two years to April 10 of 2022, ” he said.

The 19.5km PIL 1 is a project that connects Gurney Drive to the FIZ area near Penang International Airport.

Zairil said the state had also planned for a PIL 2A, which is an extension road from the main Penang island to one of the three artificial islands of Penang South Reclamation (PSR) project.

“The proposed PIL 2A is a 5.3km viaduct meant to improve traffic flow around PSR so as not to impact the traffic flow in the area, ” he said in a press statement on Monday.

He was responding to a question by Kebun Bunga assemblyman Jason Ong during a special engagement session between exco members and assemblymen at a hotel in George Town.

On the PSR project involving the reclamation of three man-made islands – Island A (930ha), Island B (566ha) and Island C (324ha) – off the south coast of Penang island, Zairil said Island A would take between six and nine years to be fully reclaimed.

He said the reclamation for island A is on a 70%-30% joint venture basis between the project delivery partner SRS Consortium and the state, with the latter having no financial risks.

“The reclaimed land will then be sold to fund the Penang Transport Master Plan (PTMP).

“SRS will bear all investments, financial risks and financing of the reclamation, ” he said.

He said the corporate guarantee of 100% liability is on Gamuda Holdings, the main shareholder of SRS Consortium which must bear all risks for any arising issues.

“The reclaimed land will not be in caveat to the bank, ” he said.

Zairil said there might still be some risks involved in the project but stressed that they would be minimal through the instrument that was agreed with SRS.

“It is a massive reclamation project to reclaim three islands off the southern coast of Penang island to fund the RM46bil PTMP.

“The project will be based on a smart city concept.

“It will create not only 300,000 job opportunities by 2050 but more green areas for commercial, housing and tourism projects.”

Zairil said PSR had yet to begin as the state was still awaiting the Environmental Management Plan (EMP) approval.

“We are expecting a reply from the Department of Environment on the EMP approval soon.”

Zairil said the PTMP involved many different components and the state government was considering other options to start the Bayan Lepas Light Rail Transit (LRT) project.

“We want it to be implemented concurrently with the PSR project so we are looking at funding options.

“If the state reclaims Island A first to raise the funds for the LRT, it may take up to 15 years before the LRT can be built, ” he said.

Zairil also said the state and SRS Consortium were now in discussions with Malaysia Airports Holdings Bhd to finalise the location of the LRT station near the Penang International Airport.

“The location of the station will need to be finalised to obtain full approval from the Land and Public Transport Agency, ” he said.

The Penang government has been aggressively pushing through the reclamation project to fund its RM46bil PTMP components.

They include the PIL 1 and Bayan Lepas Light Rail Transit.