Gamuda Bhd-led project delivery partner — SRS Consortium Sdn Bhd — for the Penang Transport Master Plan (TMP) estimates the cost of reclaiming two islands measuring about 1,300 acres (526.1ha) and 2,100 acres to be about RM7 billion to RM8 billion.

Its project manager Szeto Wai Loong said the reclamation, identified as a land swap model to finance the RM27 billion TMP, is expected to take off in 2018 once federal and state approvals for the project components are attained.

He said that an 800-acre island next to these islands was also identified for further reclamation in future, pending the state’s needs.

Szeto said that the cost of the detailed environmental impact assessments for the road and rail-based public transportation segments, reclamation, and also feasibility studies could amount to about RM300 million to RM400 million which would be borne by the state.

“We will discuss with the state government, but financing would most likely be via land swap. A tender for the reclamation will be called once approvals from the authorities are completed and the detailed design for the rail-based segment is completed,” he told The Edge Financial Daily.

He said the islands with flushing channels would have 700 acres or 15% green space, 5km beach stretch, 25km coastal park, a 30 km-long waterfront, sheltered pedestrian walkways, and designated bicycle lanes.

“It would also house a meetings, incentives, conferences and exhibitions centre, sports arena, museum, and performing arts centre,” he told a press conference earlier.

Szeto, who is Gamuda Engineering Sdn Bhd executive director, said to date, the consortium has forked out RM10 million through bank borrowings to fund the preliminary study on the reclamation which included soil and aquatic studies.

He said that it was too early to determine the construction and development profit, but is expected to discuss land use with the state when the approvals are obtained.

On the estimated cost per sq ft, Szeto said: “The state would auction the reclaimed land to [the] public. I believe it would be based on market prices and nominal value at the time of auction”.

The Penang TMP would feature a light rail transit from Komtar to Bayan Lepas, monorail from Komtar to Air Itam and Tanjung Bungah, e-bus across the North Channel, bus rapid transits on the mainland, and a 20km “spine road” connecting Tanjung Bungah to Penang International Airport, and Tun Dr Lim Chong Eu Expressway with tunnels through the hills.

He said extensive studies conducted by the Danish Hydraulic Institute confirmed that the southern coast of Penang island was most suitable for reclamation.

“This is due to its natural embayment feature with weak tidal currents, shallow waters with a depth of about 3m, and is sheltered from the effects of tsunamis,” he said.

SRS Consortium, a joint venture in which Gamuda holds 60%, with Ideal Property Development Sdn Bhd and Loh Phoy Yen Holdings Sdn Bhd holding 20% each, received its appointment letter on Aug 14.

State Local Government, Traffic Management and Flood Mitigation committee chairman Chow Kon Yeow said the TMP would be funded through the sale of reclaimed land from the proposed South Reclamation Scheme.

“The reclaimed land will be an asset of the state and as the sole owner, the state government will be able to raise the funds needed to deliver the TMP effectively in a timely and sustainable manner,” he said.

Chow said it was pertinent to implement the TMP now before the “window of opportunity is closed” as increased property development would make it difficult to identify road and rail alignments on land which is presently undeveloped.

Last week, Chow said the reclamation was expected to have a five-time economic multiplier effect amounting to RM100 billion while also being a catalyst for growth for the state till 2050.

“The reclaimed land is expected to house the new Penang International Airport and provide additional space for industries, hence the growth catalyst for Penang,” he said.

Source: TheEdgeProperty.com.my