This article first appeared in The Edge Malaysia Weekly on September 30, 2024 - October 6, 2024

STRONG investment inflows into Penang’s electrical and electronics segment have fuelled its industrial sector growth, but left the state with a palpable infrastructure headache.

Roads leading to the island are regularly congested, as are those on the island and those going into the industrial park on the mainland. At the same time, the state’s international airport is packed with not only business travellers and tourists but also cargo shipments.

There may be respite in sight, though. Conditions are poised to improve in the not-too-distant future, as the state has been busy with several much-needed infrastructure development projects, thanks to increased funding allocation by the federal government.

Crucially, it includes financing for a RM13 billion light rail transit (LRT) system, as well as the expansion of the always-busy Penang International Airport.

“All these years, we have been starved of large-scale infrastructure projects for obvious political reasons. It has been very clear that in the development budgets over the last 16 years, Penang receives very little,” Zairil Khir Johari, State Executive Councillor for Infrastructure and Transport in the Penang state government, says in an interview with The Edge.

“So, anyway, all that has changed. Maybe some states may accuse Penang of getting more now [from the federal government], but the truth is that we’ve been starved for so long that we haven’t got all our dues, in a manner of speaking.”

Penang’s upcoming LRT, also known as the Mutiara Line, will be an entirely elevated rail system that stretches 28km starting from the reclaimed Silicon Island all the way to Komtar in the city centre. It will also connect to Butterworth on the mainland.

Zairil believes the current LRT alignment, which has been finalised, to be better than originally planned. Initially, the LRT line did not include the connection to Butterworth, as it was to terminate at the Komtar building.

“Under this alignment, it goes all the way to Butterworth, which actually makes the whole project much more viable because, then, we have the numbers from people — the ridership from people coming from the mainland that makes up the bulk of the traffic.

"Our daytime population on Penang Island is significantly higher than the night-time population, owing to people coming from the mainland, Kedah and Perlis to work on Penang Island. The connectivity to Butterworth means the Penang LRT will be linked to the National Rail Network,” says Zairil.

He emphasises that the connection to the national rail network is crucial because it gives passengers the choice of making a trip by rail — versus by air or road — all the way to Penang Island and even right up to the Penang airport.

“So, that is fantastic. I mean, we would have done it if we had the resources but when we were planning it, it would have cost too much for us. But, thankfully, the federal government is able to [fund it]. So, they've set aside, I believe, the ceiling of RM13 billion for the project that's been approved by the cabinet,” he says.

Penang’s LRT project is set to begin this year and is due for completion in 2030.

Zairil says the state’s Silicon Island, spanning more than 2,300 acres of reclaimed land off the southern coast of Penang Island, will be a new job centre, where 30% of the available development land will be turned into industrial zones; 40% for infrastructure; and the rest for housing, mixed development and commercial purposes.

“And maybe a new administrative centre as well,” he adds.

It has been reported that the first factory on Silicon Island is projected to begin construction in 2026 and expected to be operational by 2027.

The expansion of the international airport is expected to cost more than RM1 billion and is to be funded by Malaysia Airports Holdings Bhd (MAHB) (KL:AIRPORT) under a compensation mechanism by the government.

In February, Transport Minister Anthony Loke was quoted as saying that the work would be undertaken by MAHB, which was “more than happy to fund the project”.

Zairil says construction was due to start in September.

"They’ve already awarded the first phase of civil works and [the expansion] will basically almost double our passenger terminal capacity to 12 million passengers a year, from 6.5 million.

“As you know, the Penang International Airport is very crowded and congested, particularly now that we have so many new direct flights coming in. Often, the infrastructure just cannot take it, and there have been complaints of long queues and so on. A bigger terminal is definitely needed to deal with the increase in passenger traffic.”

The state is also working on addressing its water supply issues through the building of four water treatment plants to support growing demand. Flood mitigation is also in the works, as two major projects — the Sungai Pinang and Sungai Jawi flood mitigation initiatives — have received funding from Putrajaya.

It is indeed a busy time for the state, as upgrading infrastructure works are being undertaken to meet its present and future needs.

Nevertheless, Zairil believes more infrastructure is needed. High on his wish list, where roads are concerned, is the Juru-Sungai Dua highway, which is projected to cost RM1.8 billion but expected to reduce traffic congestion at the Juru and Sungai Dua toll plaza.

“We’re in the midst of discussions with the federal government. Hopefully, we will get something positive out of this. This is potentially the highest-impact road project; it is the ‘missing link’ and where all the congestion is,” he says.

“We don't have the land to be able to go wider. So, the idea is to elevate the highway from Juru all the way to Sungai Dua. There will be some elements of concession because it's a PLUS road. Discussions are ongoing at the federal level between the Works Ministry and UKAS, or the public-private partnership unit in the Prime Minister’s Department.”

Another road project on Zairil’s wish list and being negotiated with Putrajaya is the Pan Island Link One (PIL 1), a 20km highway that is supposed to also help alleviate the heavy traffic load. He says, however, that it is very costly, at an estimated RM8 billion to RM9 billion.

The state is also working on its own projects, such as the RM850 million Ayer Itam bypass and a new road to Batu Ferringhi at an estimated RM1 billion or so.

“Again, we are trying to find the best possible way to [build the road to Batu Ferringhi], with the least possible social and environmental impact.

“On our own, that’s about the maximum that we can do, which is why we really need the federal government to step in. Penang is not asking [to do the projects] for free. The state contributes huge amounts of money in taxes and to the Malaysian economy.

“In Malaysia, we do not have a fixed formula of redistribution, which is why, every year, what happens in the Rancangan Malaysia is that every state will put in and argue their case and try to bid for projects.

“So, this is us trying to bid for projects, and we deserve to get our fair share,” Zairil emphasises. 

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