Why the three-island mega-project in Penang must be scrapped!

Aliran urges the state government to scrap the plan to reclaim land to create three artificial islands off the southern coast of Penang Island.

The Department of Environment has approved the environmental impact assessment for the controversial project, subject to 71 conditions.

The proponents want to start work on the project later this year once an environmental management plan is approved. But fisherfolk in southern Penang Island have vowed to continue their struggle against the project.

The rationale for the 4,500-acre reclamation has changed.

In 2015 the Penang state government chose the Gamuda-led SRS Consortium as its “project delivery partner” to implement RM46bn worth of transport infrastructure projects under SRS’s so-called “Penang Transport Master Plan” proposal. (This was vastly different and more expensive than what an earlier Halcrow consultant had recommended in its transport blueprint.)

Proponents of the SRS proposal justified the PTMP by saying it would be self-financing. They claimed no public funds would be required other than small bridging loans for working capital, as the sales of reclaimed land would be enough to finance the transport projects.

Under phase one, the state government was supposed to sell reclaimed land from Islands A and B to raise funds to finance the RM10bn single-line Penang airport-Komtar elevated light rail system and the ecologically risky RM9bn Pan Island Link highway. (Island C would be reclaimed in phase two.)

But that financing model has flopped big time. The damp property market and the slower pace of reclamation means Island A (or part of it) will generate only a few billion ringgit in net surplus from land sales in the near future. This will clearly not be enough to finance the transport projects under phase one of the SRS PTMP.

So the state government has been reduced to ‘begging’ the federal government for funds for the RM10bn light rail project while we don’t hear much about the Pan Island Link highway now.

Given this, the massive reclamation should be scrapped as it does not serve its original objective of raising funds to finance the SRS PTMP.

Instead, the massive 4,500-acre three-island project appears to be more of a property play for selected contractors and developers. This was what critics had predicted when the proposal was first mooted.

Meanwhile, the official rhetoric has quietly shifted: the reclamation is now no longer about raising funds for transport projects. Instead, it is now supposed to provide land to boost the Penang economy. But then, there is still plenty of land on mainland Penang.

Sahabat Alam Malaysia, in its recent statement, has already highlighted the real ecological concerns over the three islands – so we need not repeat them. Suffice to say, the impact on climate change, the loss of fish-breeding grounds and the consequence for food security are serious.

Given this ecological cost and the fact that the original rationale for the reclamation is no longer applicable, Aliran urges the Penang state government to drop the three-island project. The state government must also make public the full list of 71 conditions.

Aliran executive committee
27 April 2023

The views expressed in Aliran's media statements and the NGO statements we have endorsed reflect Aliran's official stand. Views and opinions expressed in other pieces published here do not necessarily reflect Aliran's official position.

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