Penang partners with SRS

  • Nation
  • Thursday, 02 Jul 2020

Working together: (From left) State Secretary Datuk Abdul Razak Jaafar, Chow, SRS Consortium chief executive officer Datuk Lin Yun Ling and SRS Consortium project director Szeto Wai Loong exchanging documents during the signing ceremony at The Wembley Hotel in George Town.

GEORGE TOWN: The project delivery partner (PDP) for the multibillion-ringgit Penang Transport Master Plan (PTMP) will be SRS Consortium Sdn Bhd.

SRS Consortium is a subsidiary of construction giant Gamuda Berhad.

Chief Minister Chow Kon Yeow attended the master agreement signing ceremony for the PTMP between the state government and SRS Consortium.

He said financial institutions have indicated that the Penang government can finance the components of the RM46bil PTMP on its own.

All that’s required is a state-backed guarantee, said Chow.

“We did talk to the previous prime minister on setting up a special purpose vehicle which could issue bonds backed by the Federal Government then.

“But we were told by the banks that a state guarantee would be sufficient, ” said Chow yesterday when asked if they have given up on the Federal Government guarantee to finance the PTMP.

In November, the Penang government announced it would issue a RM10bil sukuk bond to finance the Bayan Lepas Light Rail Transit (LRT) project, which is part of the PTMP.

The bond idea was proposed by then prime minister Tun Dr Mahathir Mohamad, who had promised to give a government guarantee on it.

However, such an agreement was unlikely now following the change of the Federal Government.

The state government is now looking at alternative models, including the Penang South Reclamation (PSR) which can be used to finance the projects.

PSR consist of three islands – A, B and C – that involves the reclamation of 1,821ha of the sea to create the islands south of the airport towards the east around Permatang Damar Laut.

Chow said they had told SRS Consortium to come up with a financial architecture plan within a month.

“In the signed agreement, the SRS and state government were responsible for coming up with RM1.5bil bridging finance and RM1bil respectively.

“We will study the financial architecture plan by SRS before taking action as no bonds were issued yet.

“We have choices, such as PSR, but we also need to finance the reclamation.

“Let’s not jump the gun and wait for SRS to present its plan, ” he said.

Chow said interest in Penang’s industrial development was strong, adding that it would be good to launch Island A under PSR and capitalise on the interest.

“But again, it would still take a few years for the island to be partially and progressively completed to meet the needs of the industrial sector, ” he said.

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