Double whammy of Penang’s tunnel and land reclamation

GEORGE TOWN: When Penangites recently woke up to the news that the state had sealed a preliminary agreement for a new undersea tunnel and three major roads costing RM6.3 billion, it inevitably stirred a lot of interest over how the projects would impact the local community and landscape.

Stretching some 6.5km, the tunnel would connect Gurney Drive directly to Butterworth, while the highways measuring a total of 20.8km would significantly shorten travel time between key sites on the island.

But there is one important link in this matter that has been overlooked by many.

It has to do with the distinct prospect that this mega project will be tied — financially and functionally — with another one, even more titanic in scale.

This is the Sri Tanjung Pinang Phase II — or STP2 in short — which is nearby, around Gurney Drive itself.

Touted to have a whopping gross development value of RM25 billion, it would be one of the biggest single projects, in terms of size and monetary worth, in Malaysia.

The project entails the reclamation of some 891 acres (356.4ha) off Gurney Drive — including a 760-acre island and the foreshore reclamation of Gurney Drive itself by 131 acres.

The developer undertaking it, Tanjung Pinang Development Sdn Bhd, is 78.8% owned by E&O Property (Penang) while the Penang government owns the remaining 21.2%.

Unsurprisingly, there are those who fear that the tunnel would usher unwelcome congestion to the already packed roads of the island, as people with vehicles from the mainland get increasingly drawn in due to the new link.

But the crowd is bound to increase, also because of the sheer number of houses and commercial units intended to be built on the massive STP2 project.

Under the current plan, the STP2 area is targeted to have about 12,000 new homes, in addition to the mixed-use commercial spaces — retail units, offices, tourism outlets and so on — occupying some 28.45 million sq ft.

The STP2 development is vital for the financing of the tunnel and the three roads. This is because the state’s agreement with the developer, Consortium Zenith BUCG Sdn Bhd, includes a funding concession that entails the state awarding 110 acres of net land to the company in the very area that is to be reclaimed for the STP2.

(Zenith BUCG will also be given a 30-year toll concession to operate the tunnel at the same rate charged for the 2nd Penang Bridge.)

It was no coincidence that E&O managing director Datuk Terry Tham had, during a public dialogue on Aug 24, stated that the company is required to surrender 110 acres to the state government (60 acres from the new island and 50 acres from land to be reclaimed on Gurney Drive) after the STP2 is reclaimed.

It’s a somewhat peculiar situation. For the awarding of land as concession for developing the tunnel and three roads is contingent to the STP2 taking place.

But technically speaking, the STP2 is not fully confirmed to take place.

If the feedback during the public dialogue on Aug 24 is anything to go by, local communities and activists are extremely worried about the consequences that such a project would have on the sensitive coastal environment, the marine ecology and general congestion on the island.

In response, the authorities have emphasised that the approval of the STP2 is first dependent on a detailed environmental impact assessment (DEIA).

(The tunnel and three roads are also subject to feasibility studies and a DEIA. The state government has reserved a right not to proceed with all or any of the roads or the tunnel after considering these reports.)

Now, the tunnel and the three roads are estimated to cost a total of RM6.5 billion. This is an enormous amount that the state government cannot afford to fully pay in cash.

So, unless it can come up with an alternative compensation scheme, the state must rely on the expectation that there will be reclaimed land to be given to Zenith.

That means the STP2 project must materialise for the tunnel and the three roads to be fully financed, under the current scenario announced by the government.

There is the question of whether the projects are necessary at all, or if they are conceived primarily because of the huge profits they would rake in.

The undersea tunnel, as the official reasoning goes, is needed to help deal with the burgeoning populations and economic expansions likely to be seen on Penang island and the northern part of Seberang Perai in the near future.

The advocates of the STP2, meanwhile, have also argued that the massive project is necessary because the population is rising.

Dr Tai Tuck Leong, a traffic consultant who spoke at the public dialogue, pointed to the national population growth rate which is rising at 3.5% annually.

In 10 years’ time, he stressed, the population will be 30% to 40% more than what it is today.

“The issue is for the future of Penang: Where should the growth be? Where are you going to site for your growth?” he said, before proceeding to describe the STP2 as the “future receptacle” for the growing population.

But, realistically speaking, would the planned reclaimed land to be developed be mainly for the locals?

If the trend for sales of new high-end property in Penang is anything to go by, it’s not just the locals that the projects are catering for; the units would very likely draw the interest of foreigners and speculators who want to make a buck by re-selling at higher prices later.

Gurney Drive and the STP2 will certainly see a surge in the density of people and buildings. Inevitably, there are misgivings about whether the existing infrastructure will be able to cope.

The STP2 developer has assured anxious citizens that there are plans for new infrastructure to facilitate better traffic flow as well as for new routes to allow existing narrow roads to be circumvented.

But it has not been enough to assuage the fears.

As it is, with a new road connection between Tanjung Bungah and Batu Ferringhi (and with Tanjung Bungah having been controversially earmarked under the Structure Plan as a “primary corridor” which allows high density projects) one can be forgiven for expecting the population and traffic in these places to multiply.

All these must put into focus the question of whether the island’s carrying capacity is even suited for such projects — both the tunnel and the reclamations.

Are the projects necessary because they can genuinely help to alleviate the impact of a growing internal population?

Or will we see a situation where the projects themselves cause the population and traffic to be increased?

If the latter turns out to be true, then it would be a great irony in having these projects in the first place.

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This article first appeared in The Edge Financial Daily, on October 16, 2013.


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