PETALING JAYA: Steeped in history, Penang is famous for its food and heritage. But if there's one thing most Penangites want to address, that will surely be its maddening traffic snarls on its congested roads.
George Town's colonial narrow roads and single direction lanes are now unable to keep up with modern times and coupled with ever-increasing vehicles on the roads, motorists are faced with traffic woes daily, stuck in their cars along the jammed roads to reach their so close yet so far destination.
The solution is to improve the island's antiquated road infrastructure and the Penang state government has mooted the idea of a RM8bil land swap for infrastructure deal.
The land-for-road deal calls for three bypass highways and a sea tunnel linking the island to the mainland to be constructed by 2020. It's a game changer the state needs to give it a fresh breath of life. The mega project will be the state's biggest infrastructure project yet and is meant to solve the island's severe congestion problems.
Traffic jams are a common occurrence in Penang during rush hours.
The proposed traffic alleviation projects are a 6.5km sea tunnel connecting Gurney Drive to the northern side of Butterworth, a 4.2km road from Gurney Drive to the Tun Dr Lim Chong Eu expressway bypassing the city centre, a 4.6km road linking Bandar Baru Air Itam to the same expressway and a 12km dual-carriage road from Tanjung Bungah to Teluk Bahang to pair with the existing coastal road.
Interestingly, besides the four mentioned tunnel and traffic by-pass projects, there are also plans for transit corridors for light rail transit.
The kicker in the land-for-road swap is that the state government will not have to pay money to build the roads. In return, contractors who undertake the projects will receive prime land which will likely jump in value after the projects are completed.
For the contractors, its more than that. They are even entitled to propose the implementation of toll payments to recover their costs of building the infrastructure.
Responding to queries from StarBizWeek, the chief minister's office said the state government inherited a concession agreement awarded toEastern and Oriental Bhd that allows the reclamation of 740 acres off the coast of Gurney Drive and Tanjong Pinang, which is part of the Sri Tanjong Pinang project.
“Hence, we are using this opportunity to swap some of the reclaimed land approved by the previous state government in exchange for infrastructure projects that will benefit the people of Penang. For a state government with little source of revenue, this is our only way to make a difference for the benefit of Penangites. Has it not been said that when the eggs are broken, make an omelette? We are making the best out of a potentially difficult situation,” the chief minister's office said.
By giving an open invitation to interested parties, domestic and international players are encouraged to participate and several foreign giants apart from China's Beijing Urban Construction Group (BUCG), namely Citic Group of China, South Korea's SK Group, as well as a couple of Japanese conglomerates and a Singapore company have expressed interest to bid for the said RM8bil worth of infrastructure jobs.
Analysts are also bullish about the development.
CIMB analyst Sharizan Rosely said in a report that although the proposed new infrastructure projects in Penang are not entirely new, the 2015 timing of their implementation is a surprise and a long-term positive.
“We think that the projects will be attractive to existing contractors and developers in the state. Within our coverage, IJM Corp and Malaysian Resources Corp Bhd are among those that already have exposure to Penang,” he said.
He said payment via a land swap would provide a good opportunity for interested companies to own land.
He expected more visibility on the potential contenders and project infrastructure in the coming months, adding that this could just be the catalyst for the construction sector, on top of the implementation of existing mega jobs such as the Klang Valley's My Rapid Transit.
With a pre-qualification exercise issued, works looked set to commence by 2015, but whenever there are new developments, benefits and disadvantages of these projects must be weighed carefully by the executors of the said projects.
The construction of the said projects might be beneficial for the state, but there are sacrifices such as a possibility of jeopardising the marine ecosystem of the state and affect the income of those who lived off the sea.
The macro-economic impact of the projects must be evaluated carefully as well, of which the prime land are said to triple in value after the projects take place, and in turn this might eventually drive up prices of commercial and residential properties even more in the already land scarce island. Towards this end, the state government had set up the Penang Housing Board aimed at building affordable housing in the state, largely modelled after the Singapore Housing Development Board. - The Star
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