GEORGE TOWN: The Penang government has revised the master agreement (MA) on the Penang South Reclamation (PSR) project, with the RM3.8bil reclamation of Island A fully funded by the project delivery partner (PDP).
A new joint-venture (JV) agreement is set to be drawn out with the PDP funding and implementing the project.
Chief Minister Chow Kon Yeow said according to the MA signed on July 1, 2020, the state was supposed to get a bridging loan of RM1.3bil with the PDP (SRS Consortium) to manage and implement the Penang Transport Master Plan (PTMP).
"However, due to the continuing impact of the Covid-19 pandemic on the economy and the withdrawal of the financial guarantee by the federal government, the PDP was told to look at alternative funding plans.
"As such, in a letter dated Feb 15, the PDP proposed the reclamation of Island A under the PSR to be borne fully by SRS Consortium without the state having to fund the project.
"This means the entire reclamation work of Island A will be internally funded by the PDP without any cost incurred by the state," said Chow during a press conference.
Chow said the state exco meeting on March 24 agreed to implement the reclamation of Island A through a JV company.
"The reclamation of Island A will not be done under the PDP model but through a supplementary agreement which will be inked later.
"Under the JV, all reclamation work of Island A will be implemented by a joint company created by the state with SRS Consortium (70%)."
The state's interest, said Chow, will be represented by the Penang Infrastructure Corp Sdn Bhd (30%).
"The state government, being the owner of the project, will give the complete and exclusive rights of the development of Island A including acquiring planning permission, creating of common infrastructure with smart city components to the JV company.
"This includes the Pan Island Link 2A and initiating marketing activities to attract investors of high technology and sales of land." Chow said the JV company would appoint Gamuda Engineering to reclaim Island A in the first phase.
"The preliminary survey and soil investigation will be carried out on March 29 at the site," he said.
SRS Consortium project director Szeto Wai Loong said Island A would be 70% public transport-based and built on the basis of environmental, social and corporate governance, so as to attract investors.
The PSR will see the creation of three islands on a 1,821ha land, to be sold to the highest bidder to finance the RM46bil PTMP infrastructure projects.