The transport infrastructure proposals for Penang put forward by the Gamuda-led SRS Consortium is expected to cost a whopping RM40bn.
This is apart from the RM6bn for three highways and a tunnel in northern Penang Island under the Zenith consortium which is being funded by a 110-acre land for infrastructure swap deal.
This adds up to a staggering RM46bn for transport infrastructure.
Now, this is much higher than the RM27bn transport masterplan put forward by consultants Halcrow, which had proposed mainly bus rapid transit and trams, along with the highways-tunnel which the state government wanted them to include.
The state government plans to fund this massive RM40bn tab for the SRS proposals by selling reclaimed land. Three artificial islands are expected to be created off the southern coast of Penang Island, which will affect the fishing communities there.
Two islands are expected to be created in Phase One (2017 to 2023) and the third island will be created in Phase 2 (2022-2030). The sale of reclaimed land is expected to generate RM20bn-28bn in Phase 1 and RM20bn in Phase 2.
Though the SRS plan includes sale of Pesta land (in Phase 1) and 800 acres of reclaimed land in Middle Bank (Phase 2), it is not clear if these two will proceed.
Property development firms will be rubbing their hands in glee over the prospect of developing up to 4,500 acres of reclaimed land from the three islands. (For Phase 1 alone, the reclaimed land would be 3,700 acres.)
Under the proposals for Phase 1, industrial land is valued at RM170-200psf, residential land RM230-730psf and commercial land RM370-750psf.
So how do we get a figure of RM160bn for the gross development value of the property development for both phases? Well, I am told land cost usually constitutes 25 per cent of gross development value. So if the total sales of reclaimed land amount to RM40bn, developers would stand to reap RM160bn in gross development value (or let’s be conservative and say RM100bn).
Whichever way you look at it, it would be a boon for developers.
This makes some people wonder if what is driving the expensive SRS transport proposals is a vision for sustainable mobility or a vision for even more (mostly high-end) property development in Penang.
In any case, a north-south highway on the island (under Phhase 1) is hardly a visionary proposal in this era of climate change and energy constraints. It is regressive – reflecting a 1970s mindset of highways as symbols of progress.
The initials SRS might give us a clue as to the driving force behind the expensive transport proposals. It stands for Southern Reclamation Scheme.
The way I see it, it is property development plans that are driving the expensive transport proposals.