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Malaysia in transition

Malaysian resort Penang to get face-lift under new government

State wants to build undersea tunnel and budget airport terminal

Chow Kon Yeow
Penang Chief Minister Chow Kon Yeow presents plans to improve infrastructure and facilities at a function on Aug. 29. (Photo courtesy of Penang state government)

GEORGE TOWN, Malaysia -- The Penang administration unveiled on Aug. 29 its vision to transform the northern island state with projects it hopes will "inspire" change throughout the nation, plans only made possible by the election of the new government in the historic May vote.

The plan under the new government, dubbed "Penang 2030," is aimed at turning the state greener, improving infrastructure and modernizing manufacturing industries. Penang is one of the more developed states in Malaysia, home to nearly two million and the base for some multinationals, including U.S. technology company Intel and German lighting company Osram.

Penang has been under opposition rule since 2008 and its plans to improve infrastructure had been thwarted by the government of former Prime Minister Najib Razak. But now, the future is considerably brighter for Penang after the May 9 election when the opposition coalition Pakatan Harapan, or Alliance of Hope, wrested power from the Najib-led Barisan Nasional, or National Front grouping, in the first change of government in over six decades.

"The vision is realistic and practical because it builds on existing projects," Penang Chief Minister Chow Kon Yeow told a gathering of several hundred guests including lawmakers, businessmen and women and activists.

Key among the plans is a 46 billion ringgit ($11 billion) transport master plan to ease traffic congestion in the city of George Town, a UNESCO World Heritage site.

Previous attempts to build an undersea tunnel to connect to the mainland were turned down by the federal government under Najib mainly due to "political reasons," according to a source close to the state government.

Penang was one of the few states under opposition rule since 2008 until the May 9 election. (Photo by Ken Kobayashi)

As some of the infrastructure projects will be built on reclaimed coastal land, the state needs environmental impact approvals from federal agencies. Using a public-private partnership model, the state will reclaim land in exchange for the construction of these infrastructure projects by the private sector.

This means the state government's reliance on federal funding will be minimum amid spending cuts under the Mahathir Mohamad-led government to strengthen Malaysia's fiscal position.

Local newspaper The Star recently reported that approvals for the reclamation and light rail transit could be obtained by the end of the year with construction to begin next year. A Chinese company is reportedly interested in building the 30 km line for six billion ringgit.

The government is also looking into expanding the capacity of Penang International Airport through a public-private partnership. Finance Minister Lim Guan Eng, formerly Penang's chief minister, recently said the government will consider budget carrier AirAsia as a partner to build a low-cost terminal at the airport.

The current airport can only handle 6.5 million passengers annually but yearly visitors have now crossed the 7 million mark, said Lim. The plan is to increase capacity to 15 million.

"Penang 2030 is meant to inspire the nation," said Chow. "If we implement our stated policies well, becoming an inspiration for others will happen by default." Other provincial states that include Selangor and Sabah on Borneo island are also mulling long-term development plans.

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