GEORGE TOWN: A long-delayed plan to reclaim the foreshore off Pantai Bersih in Butterworth has been officially scrapped after the developer failed to prove it had the financial and technical capacity to deliver the massive project.
Chief Minister Chow Kon Yeow told the State Legislative Assembly on Thursday (Nov 20) during his winding-up speech that the Penang government terminated its agreement with Rayston Consortium (Butterworth) Sdn Bhd (RCSB) after years of extensions and reassessments brought no meaningful progress.
He said the concession was originally awarded in 1999 as part of the Butterworth Outer Ring Road (BORR) deal, later revived under a 2018 arrangement and amended again on May 23, 2022, allowing RCSB to reclaim 582ha off the Bagan Ajam–Teluk Air Tawar coastline.
However, Chow said the developer informed the state that several critical obstacles had made the project increasingly unworkable.
“It faced high land acquisition costs, the northward shift of reclamation areas due to Penang Port’s expansion, and height restrictions near the Royal Malaysian Air Force base. The firm could not prove the project was feasible,” he said.
Chow added that despite granting RCSB more time, until May 31, 2025, to secure approvals and demonstrate viability, the company continued to face major technical and financial barriers.
“The cost of reclaiming such a large area exceeded the developer’s projected budget, making the project unsustainable. Technical challenges arising from port expansion and aviation safety requirements further complicated execution,” he said.
The state formally issued its termination notice on Sept 22. Chow stressed that no sand mining or reclamation work had ever begun.
“Terminating this agreement is the most prudent decision to ensure Penang’s development remains realistic, sustainable and in the public interest,” he said.
Chow also responded to suggestions by Lee Khai Loon (PH–Machang Bubok) for a post-mortem on the project’s collapse.
He said such a review was unnecessary as no physical works were carried out, but noted that the state conducts ongoing internal evaluations to strengthen early-stage project monitoring.
He emphasised that the cancellation does not mark the end of potential development for the northern Butterworth coast.
“The state remains open to planning applications from interested parties for reclamation at Bagan Ajam–Teluk Air Tawar, provided they demonstrate strong expertise and financial capability,” Chow said.
He added that any future proposals must align with Penang’s long-term planning priorities and deliver clear public benefit.
