Latest on Penang mega projects

This is the latest status of all the mega projects in Penang. These remarks are based on the Prime Minister’s reply to a question raised by the Penang Chief Minister in Parliament on 20 August 2008.

What the first three projects have in common is that the financial models were all messed up.

My comments and recommendations, for what they are worth, are in italics.

Second Penang Bridge: Federal government now studying the financial model put forward by Syarikat Jambatan Kedua Pulau Pinang Sdn Bhd, a wholly owned federal government subsidiary, based on a new bridge model. (I guess they messed up with the earlier financial model.) It is also drafting terms and conditions of a concession agreement before starting negotiations with the company. (Sounds like right hand going to negotiate with left hand.)

To cut a long story short: Still under study.

My recommendation: The cost has nearly doubled to RM5 billion. Turn it into a shorter rail link at a different location and allow the Penang State Government to hold a majority stake in the company.

Penang Outer Ring Road (Porr): Supposed to have been built under build-operate-transfer privatisation model. But not feasible without strong federal government support or high tolls. Federal government now facing financial constraints so unable to use development expenditure under the Five-Year Malaysia Plan to implement it. But project may be considered if private companies are interested.

To cut a long story short: No federal government funding.

My recommendation: Scrap it because of environmental concerns and future congestion. Move away from private vehicle ownership and introduce an integrated public transport system.

Monorail: Initial proposal in 2003 was for build-operate-tranfer privatisation model at estimated cost of RM1.1 billion. But by March 2005, cost had risen to RM2.3 billion (excluding other costs e.g. land acquisition, relocation of urban pioneers and electrical infrastructure). Model found to be unfeasible without strong federal government funding. The Cabinet then suggested that the project be financed by Syarikat Prasarana Negara Bhd with tenders called. But project was shelved because of the financial implications especially arising from higher cost of construction materials.

To cut a long story short: Shelved.

My recommendation: Scrap it. Focus on a more cost effective multi-modal public transport system featuring buses, trams, and ferries.

Mengkuang Dam expansion: The federal government had approved RM154 million under the Ninth Malaysia Plan. But the overall cost (including land acquisition, surveying, construction, waterways, and pump station) would come up to RM950 million, exceeding the government allocation.

Therefore, the preliminary work (land acquisition, design and engineering model work and preparation of tender documents) amouting to RM176 million would be undertaken during the Ninth Malaysia Plan. The actual building of the dam, waterways and pump stations would be undertaken in the Tenth Malaysia Plan.

To cut a long story short: Work staggered over a longer period.

My recommendation: Give this top priority, demand more funding, and ensure catchment areas are not logged. Also urge Penangites to conserve water.