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Tea Leaves

One island is enough for Penang

Malaysian state's offshore reclamation plans risk environmental disaster

Protesters show their opposition to the Penang South Reclamation project, a controversial Penang State government scheme to build new islands off the coast, in November 2019. (Courtesy of Penang Tolak Tambak)

GEORGE TOWN, Malaysia -- I have called the northwestern Malaysian island of Penang my home for the past 12 years, entranced by its multiethnic heritage and relatively low-key profile. The rugged forests that clad the Penang Hill area in the island's center and northwestern corner, have been my playground during the COVID-19 pandemic.

But there is another side to my island home: rampant gentrification and overdevelopment. So I breathed a sigh of relief on June 16 when I learned that the Malaysian federal government may seek to withdraw environmental impact assessment approval for the Penang South Reclamation project, a controversial Penang State government scheme to build new islands off the coast.

A decade on this island has taught me that Penangites -- in particular those of Chinese heritage, the majority ethnic group in Penang State and the main supporters of the state's Pakatan Harapan coalition government -- can't get over an inferiority complex toward Hong Kong and Singapore, two other former British island colonies that bloomed into Asian economic powerhouses.

Approved in 2015, the ambitious PSR project would create 1,821 hectares of reclaimed land for development, divided into three small islands, by dumping 190 million cu. meters of sand and rubble into the sea. The Penang Forum, a civil society coalition opposing the project, likens the plan to creating 76,000 Olympic-size swimming pools filled with sand.

Worse, note critics, the site is just 250 meters from the rustic fishing villages of Penang's southern coast, the state's richest fishing ground and most diverse marine ecosystem. The 20,000 ringgit ($4,817) compensation offered to fishermen by the state government, plus new boats and engines and four new jetties, seems woefully inadequate to support an uncertain future.

A fisherman off the coast of Teluk Kumbar, one of the villages that risks being affected by the reclamation project. (Courtesy of Penang Tolak Tambak)

In any case, the 20 years of dredging and sand mining needed to complete the project would severely damage the undersea habitat and fish migration patterns, as well as increase water turbidity, noise and vibration, according to Evelyn Teh, a Penang-based environmental and urban policy researcher.

For Penang, this could be suicide rather than exemplary development -- especially when Seberang Perai, part of the state located on the Malaysian mainland, has land suitable for many industries, as Penang Chief Minister Chow Kon Yeow told a Malaysian newspaper in 2018 -- and none of that needs to be raised from the sea.

Work was supposed to start as soon as a final revision to an environmental impact assessment had been approved. But the gargantuan project has resurfaced as a hot-button issue amid Malaysia's worsening COVID-19 epidemic and volatile national politics.

Two other controversial reclamation projects -- both Chinese-backed -- are underway in the states of Melaka and Johor, both of which are run by the Perikatan Nasional coalition, which since a 2020 upheaval has also run Malaysia's federal government. So supporters of the Penang project see any criticism as political bullying of opposition-run Penang State, rather than a genuine attempt to prevent a development disaster.

The bay of Teluk Bayu, where plans call for building the second artificial island. (Courtesy of Penang Tolak Tambak)

I am certainly not against development. But the PSR project simply doesn't make sense. Its roots lie in Penang's long-planned 46 billion ringgit Transport Master Plan, which aims to develop a seamless system of new highways, monorail and light rail transportation, trams, ferries, and tunnels -- including an undersea link from Penang's main city of George Town to the Malaysian mainland.

The state government says that a housing and commercial settlement dubbed BiodiverCity, which is set to rise on the three lily pad-shaped reclaimed islands, will be a marvel of eco-engineering that could attract desperately needed foreign investment.

Alongside environmental issues, however, the economics of the PSR project also raise questions about its long-term sustainability and feasibility. Initially, work would start only on the first island, as a joint venture between Penang State and SRS Consortium, owned by Gamuda, a Malaysian property and infrastructure company.

Returns from sales of land on the first island are supposed to fund reclamation costs, variously estimated at 8 billion ringgit for two islands in the original 2015 project plan and 7 billion ringgit for half an island in 2021, according to the Penang Forum.

SRS would retain 70% of income from land sales, and Penang State 30%. But economist and former Penang Island city councilor Lim Mah Hui of Penang Forum has calculated that the state's expected revenue from reclaiming half of the first island would barely reach 600 million ringgit in seven to 10 years' time. In a combatively defensive response to Lim's assertions, the consortium told a Malaysian news portal on May 22 that anyone can "selectively pick and choose excerpts from a [proposal] document, take them out of context, and spin a narrative." The statement failed to address reports of the sharp price hike or environmental concerns.

Offshore reclamation has been a popular expansion method for Asian cities including Dubai, Hong Kong and Singapore. But Penang's current controversy should be seen as a timely warning to Malaysia, and the rest of Asia, of the need to switch gears and protect their increasingly endangered environment.

A report published in May by Verisk Maplecroft, a British risk consultancy, said that 99 of the world's 100 most environmentally vulnerable cities are in Asia, mostly in India and China. Studies predicted that sudden increases in sea levels will put parts of cities such as Jakarta underwater by 2050, and increase the intensity of typhoons such as Jebi, which flooded Osaka's Kansai Airport in Japan in 2018. That airport is built on a reclaimed island that has been sinking since it opened in 1994.

Penang State has some justification for trusting in reclamation -- the Bayan Lepas Free Industrial Zone in the island's southeast, built partly on reclaimed land, boosted foreign multinational investment in the 1980s. But circumstances have changed, with no guarantees about when, or even if, business investment will return to pre-pandemic levels.

Comments on popular Facebook groups such as Penang Walkabouts say that without development, Penang risks "going back to the caves." But by building three more islands it may be succumbing to an inferiority complex without realizing that its more developed rivals' grass may not necessarily be greener.

Marco Ferrarese is a Penang-based writer and author of books on Asia.

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