The Penang government has agreed to scale down the Penang South Island (PSI) reclamation project by 49% by not proceeding with the construction of Island B and Island C.
Chief Minister Chow Kon Yeow said this was despite the fact that the environmental impact assessment (EIA) report for the PSI project, approved by the Department of the Environment (DoE) through a letter dated April 11, 2023, covered three islands involving a total area 4,500 acres.
He said the decision was made in response to Prime Minister Anwar Ibrahim's request for the state government to scale down the project.
"Silicon Island (Island A), covering 2,300 acres, will be implemented in two phases within 10 to 15 years for reclamation work, while reclamation work for Island B, covering 1,400 acres and Island C (800 acres) will not proceed," he told a press conference in George Town today.
The PSI was meant to involve the development of three artificial islands, with an area of 1,800ha, in the waters off Permatang Damar Laut, near Bayan Lepas.
However, the project received objections from the fishing community and environmental groups in the state as it was alleged that it would damage the marine ecosystem in the area.
Chow said it was also decided that Silicon Island would remain as an LRT depot site, involving 60 acres, while the Green Tech Park and Heart of the Island components would be maintained as an economic catalyst and new tourism product, respectively, for the state.
Chow said reclamation for the first phase of Silicon Island involving 1,300 acres, including the LRT depot site, which is expected to take seven to 10 years to complete, would not have any impact on the lives of the fishermen.
The second phase will cover an area of 1,000 acres, he said, adding that reclamation for Silicon Island, including the topside part, would take 20 years.
He said the scaling down of the project would directly affect only 115 fishermen from the Permatang Tepi Laut compared to 496 people who would be affected by the reclamation for all three islands.
"With this latest development, the social impact management plan scheme for the affected fishermen will be discussed in detail in the fishermen task force committee meeting to be chaired by Deputy Chief Minister I Ahmad Zakiyuddin Abdul Rahman," he said.
Chow said changes to the project would not result in any loss to the state government or the project delivery partner SRS Consortium as both parties had only signed an agreement for Island A.
According to SRS Consortium project director Szeto Wai Loong, the cost of reclamation and basic facilities of Silicon Island is expected to be about RM8.5 billion, whereby the company will create land parcels and auction them to the highest bidder.
The successful bidder will develop the land, he said.
Chow said the state government and SRS Consortium would not be involved in the development of the land site.
On May 6, Anwar announced that the federal government would set aside an additional allocation to help the Penang government expedite the proposed George Town-Bayan Lepas LRT project.
The prime minister also asked the Penang government to scale down the project.