Seri Tanjung Pinang Phase 2: Who profits, who loses out?

What else can you say? Volume 1 of the Detailed Environmental Impact Assessment (page 39) for Phase 2 of the Seri Tanjung Pinang project states: “The up-market nature of STP2′s mixed development tends to favour the affluent. In the process, the locals would lose out.”

Economic rational and cost-benefit analysis

A project of such monumental proportion should have clear and strong rationale as to why it is needed. What are the benefits and the costs? Who stands to benefit most? Who ends up bearing the social, economic and environmental costs? What are the net benefits to society?

a) Why is the project needed and who stands to benefit most? The Report says it is needed to relieve growth pressure and scarcity of land (Vol 2, 4-2). In fact, housing construction has been growing at more than twice the rate of population growth with excess in high-end properties. This project will not meet the affordable housing shortage. It is aimed at the top 1-2 per cent of the population, with prices in the millions. (Note, to get a RM1m loan, you must have a minimum RM20,000 monthly income.) “The up-market nature of STP2′s mixed development tends to favour the affluent. In the process, the locals would lose out” (Volume 1, page 39).

b) The cost-benefit analysis (CBA) as presented is inadequate as it is too narrowly focused only on quantifying the costs of loss of mangrove area, of seabed for macro benthos, of mudflats and seabed, and of fishing ground and ignores many other social, economic and environmental costs.

c) The Report underestimates the quantum of financial losses (RM33m-50m over 50 years) of the fisheries due to many questionable assumptions such as the benthic communities will recover in three years after dredging and fuel costs at RM1.42 per litre for the next 50 years. Also the impact on Perak fishing grounds is left out of the analysis.

d) Furthermore, the loss of income affects not only the fishermen but the general public. As fishing grounds are destroyed, the price of seafood hurts ordinary people. We cannot continue to import fish, given global overfishing and depleting fish stock. For food security reasons, the State MUST protect its own fishing grounds wherever possible.

e) Other major costs that are not quantified and for which the public has to bear are:

i) Environmental costs of further siltation. So far, STP1 has not been made to bear the cost of siltation of Gurney Drive even though the DID report identified the siltation as a result of STP1. The Report is unclear where the new siltation will occur though some figures were given with some areas silting up faster than others. No costs are provided for the remedial measures and who should bear the costs.

ii) Another major cost is the post dredging of the flushing channel. The Report expects the Penang state to maintain the post dredging of the channel every five years?! WHY? This is clearly not sustainable development. No estimates are provided. Based on the widely accepted “polluter pays principle”, the party that causes the environmental damage bears the costs. Why should the general public pay for the enjoyment of the few (e.g. estimated costs for dredging Penang Port – RM350m)?

iii) Another cost that the public will bear is the degradation of water quality from sediment dispersal. It cannot be assumed that the mitigation measures such as silt curtains would be effective. There is also no analysis and data on the faecal coliform bacteria that is the most serious known health hazard of bodily contact with the sea.

iv) The Report assumes massive improvements in transport infrastructure are required to accommodate the increased traffic flow. What are the costs and who should shoulder them?

v) The Report recognises the risks of project abandonment and says the developer should take mitigating steps to close down the project. But environmental degradation or destruction would already have occurred. No analysis is presented as to how much this would cost and how the developer would pay to compensate.

f) Finally, what aesthetic and painful losses do ordinary Penangnites have to suffer as our sea shores and views are gradually destroyed, our public access to beaches taken from us, our waters becoming polluted, our tree-lined roads choked and our quality of life steadily diminishing, all in the name of ‘development’.

This is part four of a media statement issued by the Penang Forum Steering Committee on 3 April 2014