PICSB and SRS Consortium to enter a JV to reclaim Island A

Published by Buletin Mutiara• 25/03/2021

THE Penang Infrastructure Corporation Sdn Bhd (PICSB), on behalf of the Penang government, will be entering a joint venture with SRS Consortium to reclaim Island A (one of the three islands of the Penang South Reclamation project).

Chief Minister Chow Kon Yeow said the state executive council meeting had agreed to the joint venture proposal on March 24 this year.

“Following the latest announcement, a supplementary agreement will be signed in the next few weeks.

“The reclamation of Island A will no longer be adopting the project delivery partner (PDP) model as stated in the master agreement signed on July 1, 2020,” Chow told a press conference at his office today.

Chow addressing the media.

Chow said two JV companies – a project developer (PD) and a turnkey contractor (TC) – would be set up according to the JV model.

“The two JV companies will involve PICSB and SRS Consortium with a 30:70 percent share. However, the state does not need to come up with the funds for the reclamation of Island A.

“The SRS Consortium PD will be financing the entire equity model and managing the loans needed for the Island A reclamation project,” he said.

PICSB chief executive officer Datuk Seri Farizan Darus said the cost of the Phase One reclamation of Island A (approximately 1,200 acres) is RM3.8 billion.

Farizan at the media conference.

Island A is about 2,300 acres in size.

“The state government is not coming up with a single sen. All financings will be arranged by the JV partner, SRS Consortium,” Farizan said.

Chow said a series of meetings were held between the state government and SRS Consortium to discuss the financings for the PSR, after the Federal Government pulled back the Federal Government guarantee (for the Bayan Lepas LRT project).

Back to the development of Island A, Chow said that the Penang government (as the owner of the PSR project) would be giving full rights and exclusiveness to the JV companies to conduct development works on Island A, including obtaining planning permission, provide common infrastructure with smart city features (which include the Pan Island Link 2A), and to carry out marketing activities for the sale of land as well as to attract investors from high-technology industry.

Chow said that the execution of work would be awarded to the turnkey contractor (TC).

“The TC will be appointing Gamuda Engineering to work on the Phase One reclamation of Island A,” he said.

Chow said the appointment of Gamuda Engineering was to ensure that the Phase One reclamation of Island A proceeds as planned.

“All other common infrastructure works, excluding the Phase One reclamation of Island A, will be done via open tender.

“The Penang government will be appointing an independent consultant engineer to check and confirm the payment rate charged for the implementation of the project. This is to ensure that it is implemented transparently and efficiently,” he said.

Penang South Reclamation project has not been privatised

Chow stressed that the PSR project has not been privatised.

“The land that is to be reclaimed will still be owned by the state government, and the PSR project is still a state government project. We are still responsible to provide land to the successful highest bidders.

“The islands will be developed to give a brighter future to the Penangites.

“As the state’s strategic development plan, the PSR will turn Penang into a smart city and a world-class tourist and investment destination. The project will provide land for the high-tech industry which can supply over 300,000 quality job opportunities in the future.

“The development of Island A will be the economic catalyst for Islands B and C.

“We hope the people will understand the need to implement the PSR project. It is to generate more job opportunities and to ensure continuous economic development in Penang,” Chow said.

Island A will be ESG-compliant

SRS Consortium project director Szeto Wai Loong said the entire Island A would be ESG-compliant (Environmental, Social, Governance).

“The ESG are the three key factors that will attract investors and in turn, spur economic activity for the state. The key factors are essential for multinational corporations that want to invest,” he said.

Chow (right) and Szeto showing the artist’s impressions of the PSR project.

Szeto said that a smart industrial park, called the ‘green techno park for high-tech industry’, would be located on Island A.

“It is important for us to create economic activities on the island. We will also be having a placemaking area on Island A, which we call it ‘The Heart of the Island’.

“Here, we have the affordable housing and mixed development projects for the labour market as well as the executives,” he said.

Szeto added that the Consortium was finalising the design master plan with Danish architecture firm Bjarke Ingels Group (BIG) – the company that was chosen as the lead master plan designer for the Penang South Islands (also known as PSR).

BIG and its Malaysian associate Hijjas Architect & Planner won the Penang South Islands International Masterplan Design Competition in August last year.

Szeto said an announcement would be made in a month or two after the design master plan is finalised.

“We will adopt the public transport-centric approach of 70:30 on Island A.

“You will have biking, cycling and public transport on the island A. The proposed last-mile (transportation) is the electric bus.

“This is not an ordinary mixed-development project,” he said.

Szeto said the PSR project has obtained the Detailed Environmental Impact Assessment (DEIA).

“From there, we develop the Environmental Management Plan (EMP).

“The EMP is about the mitigation measures, the offset programmes and the monitoring works when the actual reclamation takes place.

“Those are in the final stage of obtaining the approval. That is for the state Department of Environment (DoE) to monitor our work, following the DEIA,” he said.

The preliminary survey and soil investigation work of Island A would start on March 29.

Also present at the press conference were state executive council members Yeoh Soon Hin and Zairil Khir Johari, state Economic Planning Division secretary M. Maheswari, and SRS Consortium adviser Datuk Seri Dr Ooi Eng Hock.

Story by Christopher Tan

Pix by Alissala Thian

Video by Ahmad Adil Muhamad