Gamuda: Scaling down reclamation in Penang is scant regard to rule of law

• Gamuda raises the concern on the possible implications for “approval process of future development projects” given that the PSI project was scaled down half way through it. Are foreign investors more reassured and undeterred from investing in our country?”
• Gamuda said the EIA approval for PSI project was secured following a “stringent and professional” process starting in 2021 including two public displays to gather public feedback and a series of technical review meetings.

KUALA LUMPUR (May 16): Gamuda Bhd, the majority owner of the consortium that undertakes Penang South Islands (PSI) reclamation works, laments the government’s decision to scale down the PSI project.

The construction giant claims that the move to downsize the project to reclaim only one island, or 2,300 acres, from the initial plan of three islands, or 4,500 acres, is undermining the environmental impact assessment (EIA) granted for the project and the rule of law underlying the assessment.

Gamuda raises the concern on the possible implications for “approval process of future development projects” given that the PSI project was scaled down half way through it.

“Are foreign investors more reassured and undeterred from investing in our country?

“The clamour for the project to be scaled down or even scrapped by parties uneasy or unhappy with the approval decision reflects the scant regard for the integrity of the due process and even the rule of law underlying it,” said Gamuda in a statement.

Gamuda holds a 60% stake in the consortium, called SRS Consortium Sdn Bhd that undertakes the PSI project, while Penang-based Loh Phoy Yen Holdings Sdn Bhd and Ideal Property Development Sdn Bhd hold 20% each.

SRS was roped into the PSI project in 2015, in return for funding the Penang Transport Master Plan as the infrastructure development did not get the blessing of the Barisan Nasional-led federal government at that time, as the state government was controlled by opposition parties then.

The Penang state government officially appointed SRS as the project delivery partner in July 2020 with a fee of 5-5.85% based on the cost of the project, which include urban rail, highways and PSI, while Gamuda will be providing a funding plan that includes a RM1.3 billion bridging loan to kick-start the reclamation works.

Last Thursday, Penang’s Chief Minister Chow Kon Yeow announced via a Facebook post that Prime Minister Datuk Seri Anwar Ibrahim directed the state government to reduce the project, after considering concerns raised by various parties.

However, Gamuda said the comprehensive and transparent due process leading to the approval of the PSI project covers not only the concerns of the environmentalists and the "anti-development" lobby but also balances with the well-being of the communities in the vicinity of the project and economic development roadmap agreed with the Penang state planners.

“There are channels provided for parties if they choose to appeal against the approval decision. As a recent example, following an appeal, the Federal Court rescinded DBKL’s (Dewan Bandaraya Kuala Lumpur) approval to build apartments on part of Taman Rimba Kiara. We can only be envious that the rule of law and due process was upheld,” the group commented.

Gamuda said the EIA approval for PSI project was secured following a “stringent and professional” process starting in 2021 including two public displays to gather public feedback and a series of technical review meetings.

“The process involved subject matter experts and specialist studies covering hydraulics and hydrology, social impact, marine and coastal ecology. Over 4,000 official feedbacks were registered during the public display process, of which an overwhelming 93% of public comments were positive,” it said.

Gamuda also said the group is making efforts in improving the livelihood of the fishing community in the south coast of Penang Island, 63% of whom have a monthly income range between RM1,000 to RM2,000, citing a survey by independent consultants.

“We are determined to improve their livelihoods by immediately improving their catch and eventually by preparing them for the job opportunities arising from the long-term project,” it said.

“Together with the Penang state, through our three service centres (Pusat Khidmat Setempat Nelayan), we are providing larger boats with bigger engines.

“We are also upgrading local berthing and boat repair facilities, as well as ensuring all-weather access to the sea. In the next 24 months alone, we have identified 550 marine-related jobs for the local workforce, from seafaring work to being crew members of the sand dredgers,” it added.

In the longer term over the next 20 years, Gamuda said “thousands of jobs” are also available during the construction phase.

“We plan to roll-out TVET courses for the local youth as a pathway to uplifting livelihoods through better paying jobs.

“We can understand the indignation of our service centre staff who frequently witness self-anointed NGO personalities whizzing through the site in two hours and then appearing in media the next day berating the project and pouring out their sympathy for the fishermen,” it said.

Gamuda further elaborated that the EIA approval conditions also encompass measures under the PSI Ecology Offset Masterplan, where relevant government agencies and academic institutions jointly collaborate with the group to develop programmes designed to enhance marine biodiversity in the project vicinity.

Gamuda said these programmes have proven to be effective globally, “provided they are located right and designed well”.

“As a result of these initiatives, the PSI project has secured a high Social Impact Assessment approval rating of 79.1% from the local community, and more specifically, the support of 74.8% of the local fishermen,” it said.

Shares of Gamuda closed seven sen or 1.7% lower at RM4.08 on Tuesday, giving it a market capitalisation of RM10.85 billion.