Penang remains steadfast to develop its LRT project: EXCO Zairil

Media StatementGeorge Town, 8 December 2021

Penang Will Always Find A Way

I read with interest a recent commentary on the Penang LRT project, which appears to lay the blame on the State Government for both its delay and purportedly poor planning.

As always, the Penang Government is open to criticism and differing views. In Penang, freedom of speech is a sacred precept of democracy. However, we also do believe that opinions should be put into perspective.

Federal-State relations

Firstly, it goes without saying that public transport planning should be left to professionals and not politicians. And in fact, it has always been the case in Penang. The original transport master plan commissioned by the State Government in 2011 was produced by Halcrow, an international engineering firm.

Subsequently, following the appointment of a project delivery partner, an alternative and more detailed Penang Transport Master Plan (PTMP) was completed in 2015. This report, which delved down into more practical construction considerations, was produced by a phalanx of global consultancy firms such as Arup, CH2M HILL (now part of Jacobs), TY Lin International, and others. If these reputable firms are not considered professionals, then I do not know what would qualify as such.

Secondly, and this has been a bone of contention for the Penang State Government since 2008, we must not forget that public transport is under the sole jurisdiction and purview of the Federal Government. It is not a State matter, and technically we have no regulatory power. In fact, the State Government has no control even over bus routes in Penang, though we overcame this by paying the Federal Government-owned bus company to run a few preferred routes for the benefit of Penangites.

In such a context, the proposed light rail system to alleviate traffic congestion in Penang should actually be the responsibility of the Federal Government. In fact, if one’s memory is able to stretch back to when Barisan Nasional was ruling Penang, a monorail system had in fact been announced before the 2008 General Election. Unfortunately, after Pakatan Harapan unexpectedly won in Penang, Putrajaya proceeded to cancel both the monorail as well as the Penang Outer Ring Road project under the 9th Malaysia Plan mid-term review.

The message to Penang was as clear then as it is now – Penang is on its own. Hence, after losing the monorail project, our Government began to look for alternatives because we believe the people should not be victimised by immature politics. This consequently led to the various planning processes as I mentioned earlier and eventually the proposed Bayan Lepas LRT line linking Komtar to the airport and to the proposed PSR (Penang South Reclamation) islands.

Technical hurdles

Rest assured, the State Government is committed to delivering the LRT project as expediently as possible. From the time the project delivery partner SRS Consortium was appointed in 2015, efforts were made to secure all necessary approvals from the relevant Federal authorities. As one can appreciate, these things take years due to countless deliberations and reviews on the proposed alignment. This is quite the norm, as the Klang Valley MRT project itself was 10 years in the making.

In Penang, the LRT proposal was subject to a three-month public inspection from August to November 2019, as required under Section 84 of the Land Public Transport Act 2010. During the public inspection, 97% of 23,218 Penangites and visitors stated their agreement with the proposed LRT system. Had the majority disagreed, this discussion would be moot.

Over the last few years, incremental progress was made. Various approvals were obtained including the Environmental Impact Assessment (EIA) Report for the PSR and conditional approval for the LRT rail scheme.

Unfortunately, just before the PSR could kick off, a major setback occurred when the Department of Environment’s Appeals Board ruled to nullify the previous approved EIA. What made matters worse was that the grounds for the decision had nothing to do with environmental concerns but in fact a highly disputed technicality, namely that the approval for the EIA had been given before the gazetting of the PSR in the Penang Structure Plan 2030. This despite the fact that the PSR had already obtained approval from the State Planning Committee and had been presented to the National Physical Planning Council as required by law.

This controversial decision, which the State is challenging by way of judicial review, has resulted in the PSR project being delayed, and with it the LRT as the reclamation was meant to be the funding mechanism for the light rail system. Besides that, the LRT rail scheme’s full approval was also conditioned upon the PSR’s EIA approval.

A question worth billions

Central to the issue of the LRT project has always been funding. As alluded to earlier, major public transport infrastructure projects are typically fully financed by the Federal Government. This includes the LRT and MRT in the Klang Valley, as well as the East Coast Rail Link (ECRL). However, there seems to be a blind spot when it comes to Penang.

Prior to the 2018 General Election, the PSR development had been proposed as the funding model for the LRT. When Pakatan Harapan won Federal power, Penang began to appeal for Federal funding. Approval in principle had been granted for the State Government to raise funds via the issuance of bonds backed by a sovereign guarantee from the Federal Government.

Besides bonds, Penang was also offered a soft loan by the Asian Development Bank (ADB) amounting to about USD500 million (RM2.1 billion) for the LRT project. I had personally participated in discussions between the ADB and the Ministry of Finance.

As luck would have it, the Pakatan Harapan Federal Government fell in early 2020 and everything was undone. The Federal Government rescinded their sovereign guarantee along with the approval for ADB financing. We were back to square one.

Charting our own path

While we are not left with many options as far as financing the LRT is concerned, the State Government is still considering all possibilities. As reported to the Penang Legislative Assembly last week, we are studying the option of calling a request for proposal (RFP) next year to invite interested parties to submit their proposals to design, build and operate the LRT line.

The State Government regrets the delay in the LRT project. Although we have tried our best, some things are beyond our control. Perhaps it is too much to ask to be treated fairly by the Federal Government, despite the importance of Penang to the national economy.

Yet whatever the challenges, the Penang State Government remains steadfast in our perseverance to see through the Penang Transport Master Plan and the LRT project. As we have done in the past, Penang will always find a way.

Zairil Khir Johari
Penang State EXCO for Infrastructure and Transport

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