GEORGE TOWN: The Penang government will issue bonds that it will also guarantee to raise funds for the RM2 billion Penang South Reclamation Scheme (PSRS) project.
Chief Minister Chow Kon Yeow said the decision was made based on the advice of financiers that approval from the federal government was not required.
Penang lost the support of the central government when Perikatan Nasional (PN) replaced Pakatan Harapan (PH) in Putrajaya in March.
“We don’t need a guarantee from the federal government. A state issuance will suffice,” Chow said when responding to questions on how the state will continue with the RM46 billion Penang Transport Master Plan (PTMP) project.
The PSRS project involves the reclamation of three islands measuring a total of 4,500 acres, south of Penang island. The plan is to sell the reclaimed islands and the proceeds be used to underwrite the cost of the PTMP project.
The PTMP comprises a light rail transit system and two interlocked highways that will snake through Penang island.
When PH was still in Putrajaya, it agreed to guarantee up to RM10 billion in federal-issued bonds for the project. But with the collapse of the PH government, Penang lost the guarantee.
Chow said the Penang government will study the financial plan and if there is a need to issue bonds, “we will be ready”.
The PTMP project’s delivery partners, SRS Consortium, will propose a plan on how to finance the project, including the need for a bridging loan to kick start the reclamation works off Teluk Kumbar.
“SRS is to submit the plan to the state within a month so that we can look at the costing and to consider various options of financing the project,” Chow said.
Earlier, he signed a master agreement with SRS to enable the consortium to officially proceed with the reclamation work as well as the construction of two highways and the LRT system.
SRS is a consortium comprising construction giant Gamuda Bhd with a 60% share, Ideal Properties (20%) and Loh Poh Yen Holdings (20%). The consortium won the project in an open tender on Aug 12, 2015.
