Seri Tanjung Pinang Phase 2: Who’ll pay for damage control if demand for island paradise dries up?

Part Four of a series of articles on Phase 2 of the Seri Tanjung Pinang project, published by fz.com

by Sangeetha Amarthalingam

GEORGE TOWN (April 2): When seen from the top, the artist’s impression of the Seri Tanjung Pinang phase two development (STP2) – the controversial giant reclamation project off Penang Island’s east coast – displays a negligible image of an ear-shaped island separated by an 80-metre canal off the coast of Tanjung Tokong.
But the mammoth scale of the reclaimed island and a 5km extension of Gurney Drive on the ground belies the aerial image.

Contained within the STP2’s Detailed Environmental Impact Assessment (DEIA) are the features of the project that have been divided into three phases – Phase 2a, 2b and 2c.

Roughly, out of the 760-acre reclamation done by Tanjung Pinang Development Sdn Bhd, a subsidiary of E&O Property Development Berhad, 127.99 acres of it comprised Phase 2a that straddles the Tanjung Tokong and Gurney Drive coasts.

The remaining space includes the rest of Phase 2a on the island that are adjacent to Phase 2b and 2c that will house 351.7 acres of residential units, 163.8 acres of commercial units and 86.09 acres of open space and buffer zones.

No financial assurances for mitigation measures

Among them are two categories showing `housing’ and `place making’ that were highlighted by US-based scientists Dr Mark Chernaik and Dr Heidi Weiskel who questioned what would happen in the event the STP2 project is abandoned.
In their evaluation report, the Environmental Law Alliance Worldwide scientists opined that the DEIA contained no financial assurances that mitigation measures would be implemented if STP2 failed.

“The description of the STP2 project is grandiose. For example, the housing feature comprises eight districts consisting of neighbourhoods, and the creation of a sustainable community for the full cross-section of Penang’s society.

“It also includes 12,000 new homes including starter-homes and apartments and active mixed-use places throughout the island that integrate work places with homes alongside education, places of worship and leisure or cultural facilities,” said Chernaik.

The other example that described STP2 as `place making’ revealed that the island will `belong to all Penangites, become a festival island that provides civic spaces for public activities from dragon boat racing to food events’.
The island also aims to provide a `cultural public promenade ending with a landmark attraction’, an international marina and yacht club and have a `continued respect for the heritage of Penang island’.

Risk of financial collapse

Chernaik said grandiose coastal development projects are at risk of financial collapse if consumer demand for the project evaporates while developers are spending great sums to build project infrastructure.
In fact, he added, the abandonment of coastal construction projects also afflicted Malaysia that was considered one of the `most common’ and `serious problems’, plaguing the construction industry given the number and value of the projects.

Citing a report in the evaluation obtained by fz.com, Chernaik said such consequences not only affected the immediate purchasers but also other project players and the public.

“Chapter 11 of the DEIA admits of the STP2’s potential abandonment. It states, `should the reclamation works be abandoned, it may cause adverse impacts particularly with regards to physical stability, hydrodynamics, public safety, ecological conditions and sustainability, aesthetics, land use, social expectations and economic conditions. Temporary and permanent closure planning must be undertaken by the project proponent with appropriate environmental measures, while complying with laws and acts, public interest and ensuring the company’s environmental standards are achieved’.

“The DEIA also mentions the permanent closure where `there is no intent to resume reclamation activities as well as the topside development and the partially created land will remain as it is. As such, a permanent closure measures should be carried out by the project proponent,” Chernaik pointed out.

To this, he said, many if not all of the mitigation measures proposed in the DEIA particularly measures designed to mitigate impacts to fishing communities depended on the project proponent remaining financially solvent.
Damning effects on society, economy, environment

In their evaluation, Chernaik showed how a Spanish study on the negative consequences and impacts generated by abandoned urbanisation processes caused damning effects on the society, economy and environment.

In terms of socio-economic impacts, the Spanish example showed that loss of jobs and value of the area, marginalisation of the population and transfer of cost between private and public sectors were possible consequences.

As for environmental impacts, abandonment could cause visual impact, landscape modification, erosion, loss of biodiversity and pollution.

Therefore, Chernaik added, a critical deficiency of the DEIA is its failure to identify who would pay for the implementation of mitigation measures if the project was abandoned or closed permanently.