Penang to auction six-acre land to raise funds to complete Ayer Itam bypass

GEORGE TOWN (Sept 7): Penang will auction a six-acre land next month to raise funds to complete the Ayer Itam to Tun Dr Lim Chong Eu Highway bypass project.

The project’s construction is nearly complete at 92.46% as of Aug 31, while financial progress stood at only 81.69%, according to a Monday statement from Zairil Khir Johari (pictured), the state’s executive councillor for infrastructure, transport and digital executive.

The contractor, Consortium Zenith Construction Sdn Bhd, sought the state government’s assistance to monetise the land to generate cash flow and ensure the project’s completion by April 2027, he said.

The toll-free dual-carriageway stretching six kilometres is intended to provide an alternative route and ease traffic congestion in George Town. The project, which began construction in February 2021, comprises elevated viaducts, ground-level roads and other structured sections.

However, the project has faced delays linked to financing and site logistics. The bypass project is funded through a land-swap method, where land plots are transferred based on completed work claims, rather than through cash payments to the contractor.

The statement confirms a report by The Edge Malaysia Weekly on Aug 31, 2026 - September 6, 2026 about the auction. The sale could generate more than RM300 million, people familiar with the matter told The Edge.

Consortium Zenith has so far claimed completed works worth RM696 million. About 12 acres of land worth RM427.657 million has been transferred to the company while the remaining value of land claimed but yet to be transferred is RM225.768 million.

The prime freehold plot, identified as P.T. 858 (Plot 7A), Section 2, Bandar Tanjung Pinang in the northeast district, will be offered through a public auction on Oct 7.

Located next to Gurney Bay and Andaman Island, the plot has a reserve price of RM313.632 million, equivalent to RM1,200 per square feet.

“Profits from the sale will be shared between the state government and CZC,” Zairil said.

Prospective bidders are required to submit a bank draft deposit equivalent to 1% of the reserve price, or about RM3 million, payable to the District Land Administrator before 11am on the auction day.

One Asia Property Consultants (PG) Sdn Bhd is the appointed auction agent.

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