KUALA LUMPUR: Two Hong Kong investors have proposed to the Penang state government to build a concrete deck island measuring 2,500ha instead of reclaiming the Middlebank in a land swap deal for the RM27 billion Penang Transport Master Plan (PTMP).
State Local Government, Traffic Management and Flood Mitigation committee chairman Chow Kon Yeow told the media last month that the 15-year PTMP would be funded via a land swap deal.
The land swap business model, involving the 607ha Middlebank land, is similar to the funding agreement with Consortium Zenith BUCG Sdn Bhd which received 110 acres (44.51ha) of land after being tasked to build the RM6.3 billion Penang Undersea Tunnel.
Requesting anonymity, the source told The Edge Financial Daily that the foreign investors have offered a private financing initiative solution to the PTMP by building a concrete island platform dubbed Menapolis (elevated water city) instead of reclaiming Middlebank to resolve fears of environmental impact.
It is believed that the 15-year five-phased Menapolis project that could house a population of 250,000 by 2030, is expected to feature electronic, electrical, industrial, commercial, residential and hospitality developments.
It would also incorporate green energy technology, health services, government offices, recreational parks, an artificial beach, as well as security and safety services, the source said.
This latest revelation adds a twist to the conditions related to the deal offered by the Penang government if it chooses to accept the concrete deck island proposal tagged at a gross development value of RM142 billion, the source said.
The source added that the cost of building the decks would, however, require cross financing and expertise, which the investors were already privy to, including that from the Dutch Hydraulics Institute (DHI).
The source said the Hong Kong investors, represented here by independent strategic adviser Datuk Dr Nik Zamri Majid, and who are also involved in property developments in China, had suggested that the offshore concrete decks be built off Gertak Sanggul near Pulau Kendi.
The source said the plan was for the appointed project delivery partner (PDP) for the PTMP to purchase the rights from the Hong Kong investors to develop the decks while earning construction and development profits profits.
The contractors are expected to earn between 20% and 25% profit from the deck development, while the state government would benefit through local and foreign investments, and upstream and downstream industrial activities, the source said.
“It is believed that the contractor would be able to earn profits from the construction of the PTMP, Menapolis, development on the decks and from the sale of the developments,” the source said.
The proposal by the Hong Kong investors is not new to Penang as it was once suggested but rejected by Chief Minister Lim Guan Eng in January 2013, said the source, adding that this would be the biggest concrete deck in the world.
Back then, a Kuala Lumpur-based company Al Cube Sdn Bhd consisting of local and Hong Kong investors proposed to build a RM75 billion “offshore concrete structure for industrial development” on stilts in Balik Pulau.
It was to feature electrical and electronic, and oil and gas industries, government offices, schools, hotels, residences, parks, and an artificial beach, and house about half a million people.
When contacted, Nik Zamri, who was also its then project consultant, declined to comment on the investors’ latest venture in Penang.
“This time, the investors who were represented by a local alliance, proposed the solution to land reclamation to the state during a PTMP briefing in Komtar on March 9.
“They admitted their inability in fulfilling the entire requirement in the PTMP (consisting of recommendations to reduce traffic congestion) but were certain they could solve the issue of land reclamation,” the source said.
The source said the investors predicted a value of RM750 per sq ft for the decks when completed. The investors believed concrete decks reduced environmental impact.
“The land value is based on land prices in Singapore, Japan, Hong Kong and Japan because of facilities that would be made available such as renewable energy and mixed development,” the source said.
However, the source said the investors were also keen on working with the PDP to build the tramway at an estimated cost of between RM850 million and RM1 billion on the island.
The source said the investors were aware that most of the bidders for the PTMP were “not very keen” on building the tramway because of the low returns.
“Thus, the investors are willing to work with the PDP to build the 19km tramway from Weld Quay to the Penang International Airport. Its local alliance is believed to have been approached by leading trams and rail manufacturers to develop it.
“They include German Siemens AG which would be using Chinese technology, and plane and train maker Canadian Bombardier Inc. The investors might seek help from French contractor Vinci Construction Grande Projets.
“The local alliance, who is said to have ample experience in this field, has spoken to the bidders to offer the investors’ services as well as the proposal to build the concrete decks.
“If the investors’ proposal is accepted, DHI will be tasked to conduct the environmental impact assessment,” the source added.
This article first appeared in The Edge Financial Daily, on April 13, 2015.