If even a 1.4km highway faces cashflow problems…

… what will happen when they try to build the RM9bn (or RM7.5bn, depending on who you ask) 19.5km “Pan Island Link” – all six lanes of it with four tunnel stretches on risky, sensitive hill terrain.

Even a current small highway project on the hills –  the 5km Bukit Kukus bypass road (call it a test run for PIL) – already looks jinxed. Last year, some beams collapsed at the construction site. Days later, a landslide there killed a string of migrant workers. The site was then slapped with a temporary stop-work order. And now another stretch of the same highway is facing cashflow problems. And so far they seem to be having a tough time managing the slopes…

FMT reports:

The 5km bypass road connecting Bandar Baru Air Itam and Relau is being undertaken by the Penang Island City Council and two private developers – PLB Land Sdn Bhd (PLB) and Geo Valley Sdn Bhd (Geo Valley).

The council will build most of the three-section bypass road, while a 1.4km stretch will be built by the two developers, who are white knights at an abandoned housing project close by.

The housing project, known as Majestic Heights, is next to where the elevated portion of the road will be built. It hit several snags in 1998 and was abandoned in 2003. At the time, the project was 70% complete.

PLB and Geo Valley took over the project as white knights in July 2015 and, in return for the project site, were told to build the 1.4km stretch of the bypass road directly next to the land for the city council.

Today, Zairil said the two developers were experiencing slow sales for their new affordable housing project on the site, hence the cash flow issue.

“Nevertheless, the bypass road project as a whole is progressing well with the construction at 75% complete. The section undertaken by the developers is slower than usual due to cash flow issues but we expect the entire project to be completed by next year,” Zairil told reporters during a site visit here today.

So this was a swap deal of sorts. What did they get in return for being white knights?

And why are sales of “affordable housing” so slow?

If even sales of “affordable housing” are so slow, what can we expect from the three articificial islands off the southern coast, where 70-80% of the homes to be built will not be “affordable”. This is compounded by the reality that Penang is already faced with a serious property glut – a lot of it high-end – which is larger than London’s glut.

Add to that, the reclamation will take years to complete, and the potential for a serious cashflow problem in building the Pan Island Link and the LRT cannot be dismissed.

Why, even the federal government has been unable (so far) to cough up a RM1bn “bridging loan” to kick off the project. So how are they going to manage to come up with working capital to finance the RM17bn infrastructure under the first phase of the “PTMP” and the land reclamation itself.

Why don’t we just improve our bus system first? After all, well before Singapore built its MRT system, the government there worked for years on improving its bus system – with great success. Today, the republic’s buses carry more than half of Singapore’s public transport users – yes, more than the number of MRT users. Simon Tan writing for Aliran outlines four easy ways to improve the bus service in Penang.

Meanwhile, as Penang’s ecological nightmare continues, FMT has just revealed that Penang port has been found to have three times (yes, three times) more imported plastic waste than Port Klang.

FMT reports:

About 7.4 million tonnes of unwanted plastic waste, mostly from Canada, has been stranded at the Butterworth port since January.

It remains unclaimed by the importers, the Customs Department said today.

The 7.4 million tonnes figure is derived from the maximum payload of 28,000 tonnes that each of the 40-foot containers can carry.

This effectively beats the 3,000 tonnes of plastic waste from 60 containers found in Westport, Port Klang, Selangor, which were recently ordered to be shipped back to their ports of origin by the government.

Penang leads once again!