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The Upcoming Northern Development Corridor (Part 1)

Penang, comprising the island (area: 293 sq km) and Seberang Prai (area: 760 sq km) on the mainland, has long been a favourite among tourists and, over the last 10 years, has welcomed more than 3 million visitors per year, out of which more than 1 million are international visitors, with 37% being repeat visitors. Tourists are attracted to Penang’s beaches, its rich cultural heritage, a large variety of local delicacies and its cost advantage.

Due to these factors, Penang is the state with the highest number of foreigners living in Malaysia registered under the “Malaysia My Second Home” programme (MMSH). Job creation in Penang has been happening since the advent of foreign direct investments (FDIs) in the 1990s. Penang’s FDI rose from RM1 billion in 2004 to RM4 billion in 2006, thus holding third position among the states in Malaysia for FDI investments.

About 75% of Penang’s FDIs is largely in the electrical and electronics sector, with 40% being contributed by the US companies. Penang’s strength has always been its ability to attract semiconductor and information technology giants. It had served as an offshore base to technology giants such as Intel, Motorola, Agilent Technologies, Dell and Seagate.

Under the 9th Malaysia Plan (2006-2010), Penang is set to gain as a beneficiary as it would be receiving some RM6.6 billion for large infrastructure developments (Penang 2nd Bridge, Penang Monorail and Penang Outer Ring Road) and additional road-upgrading works.

The Penang Monorail project was finally approved on March 31, 2006 under the Ninth Malaysia Plan. This monorail line would connect Tanjung Tokong in the north with Bayan Lepas in the south.

Penang has also made it to the Top 10 most liveable Asian City list on the strength of its thriving economy and a pleasant retreat for foreigners as a second home and a tourist destination as well. It is due to the economic activity and major projects in the pipeline for Penang that REHDA (Real Estate & Housing Developers’ Association) Penang branch chairman Jerry Chan Fook Sing said it has made the state becoming more bullish on the property outlook for 2007. With an international airport at Bayan Lepas, a deep water wharf at Butterworth, universities, international schools, manufacturing hub, high-end private hospitals and ample shopping amenities etc, it is not surprising that Penang property prices have always maintained its level and it will continue to do well and be in the rise.

For example, at the peak of the property boom just before the 1997 crash, land in prime areas in Penang cost between RM80 psf to RM200 psf. The luxurious condos in the Gurney Drive area were going for RM300 psf. Today, these peaks have been surpassed, and land prices in prime areas such as Jesselton, Green Lane, Tanjung Bungah and Georgetown are going for between RM100 psf to RM250 psf. The luxurious condos are being sold from RM400 psf to RM450 psf.

There are a lot of development projects being planned for the state such as the current Butterworth Multinodal Transport Terminal incorporating a bus, ferry & KTMB train terminal fashioned against similar aspects of the KL Sentral Transportation Hub in Kuala Lumpur. According to Second Finance Minister Tan Sri Nor Mohamed Yakcop, it is set to begin construction by end of 2007.

The multi-million project, with basement car parks and multi-storey offices and SOHO units, was conceived as a replacement for the current ageing bus terminal at the Sultan Abdul Halim Ferry Terminal that had been sidelined for the past six years. Approval to develop the site had already been obtained from the Penang Port Commission (PPC) or Suruhanjaya Pelabuhan Pulau Pinang and the local state authorities. The land is owned by Yayasan Amanah Hartanah Bumiputera that purchased the property from the PPC recently. The task of developing the site was entrusted to MRCB (Malaysian Resources Corporation Bhd) as the main developer as MRCB has the expertise (KL Sentral Transportation Hub) and a willing partner in Penang Port Sdn Bhd, which also owns most of the land involved in the project. The advantage of having PPSB as a partner was because it had a better understanding of traffic flow problems in Penang than any other party to this development.

Penang Port Sdn Bhd said it would introduce a fast boat service on the Penang Channel by end of 2008. Penang Port chief operating officer Mohd Naina Merican said the fast boats, which could cater to 200 foot passengers and 50 motorcycles only, would take half the normal time the existing ferry would take to complete the Channel journey. The normal time a ferry takes is about 18 minutes. Penang Port Sdn Bhd is prepared to purchase five units of double-decker boats to complement the existing ferry services. The number of ferries would then be reduced from the current seven to four when the fast boats were implemented. The ferries would eventually be converted to carry only motor vehicles. Naina said Penang Port would reduce the use of the ferries to cut losses. The losses incurred in the ferry transport business, according to managing director and CEO Datuk Ahmad Ibnihajar, was attributable to high ferry maintenance costs. Penang Port continues to provide the ferry service as a result of social obligation.

Datuk Ahmad said effective 1st August 2007, two lanes in the vehicle-waiting area at the terminal compound at the Penang side would be closed to make way for a RapidPenang bus station. The space could accommodate up to 8 RapidPenang buses.

On the PORR project, MRCB was brought in to ensure that the Penang Outer Ring Road (PORR) would start within the time frame specified under the 9th Malaysia Plan (2006-2010). It was also reported that the PORR project would cost 30% more than the original cost of RM1.02 billion. This is due to inflation impacting on the cost of building materials.

The Penang Outer Ring Road (PORR) stretches some 17km from Tanjong Tokong on the northern side of Penang Island to Gelugor on the eastern flank of the island. The highway runs through 8 interchanges and 4 toll plazas and passes by residential enclaves such as Tanjong Tokong, Kelawei-Bagan Jermal Area, Jesselton Heights Area, Batu Gantung, Rifle Range Area, Farlim township (formerly TheanTeik Estate), Paya Terubong, Green Lane Area, Bukit Gambir Area and ends up in the Gelugor Area, close to the Penang International Airport at Bayan Lepas.

The PORR was planned with the sole purpose of traffic dispersion in heavily congested areas such as along Jalan Air Itam, Jalan Tanjong Tokong, Jalan Sultan Azlan Shah and the congested suburban areas. The 4-lane PORR is designed with speed limits of up to 80kph and there is some reclamation works to be carried out at the Gurney Drive waterfront as well. A new “Gurney Drive” is also on the blueprint and it will include a public park and a promenade on the beachfront.

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