INVESTORS in the Bayan Lepas industrial zone are backing the Penang South Reclamation (PSR) plan, saying it will boost the economy amid criticism that it will destroy the environment.

The PSR project off the southern coast of Penang island is near the 526ha Bayan Lepas industrial park – the island’s sole industrial area and the state’s third largest.

PSR’s 930.7ha Island A – the biggest of the three islands to be reclaimed and earmarked for industrial and residential projects – will expand the Bayan Lepas industrial area.

State investment arm Penang Development Corporation, which developed the existing Bayan Lepas free trade zone (FTZ) in 1972, said the expansion was “important and necessary” as existing multinationals there sought to expand operations.

“(With the expansion) PDC will be able to redevelop and rejuvenate the existing industrial parks to meet current and future demands, such as Industrial Revolution 4.0 (IR4.0) requirements, facilities and services,” PDC general manager Mohd Bazid Abd Kahar told The Malaysian Insight.

State investment promotion agency investPenang is also counting on Island A to sell Penang as a choice investment destination.

“Over the years, we have received numerous requests for land in the Bayan Lepas FTZ from existing and potential new investors, but it is fully occupied,” the agency said in a statement to TMI.

In its statement, investPenang listed proximity to the airport and the vibrancy of the island as reasons many investors prefer Bayan Lepas to Penang’s mainland.

Penang has a total 3,290ha of industrial land, which houses semiconductor, electrical and electronics (E and E), automotive, electronics manufacturing services (EMS), light-emitting diodes (LED), life sciences or medical devices, aerospace or avionics, and renewable energy companies, as well as the halal food industry.

Other than Bayan Lepas, the other industrial parks are in Prai (890ha), Batu Kawan (607ha), Bukit Minyak (437ha), Penang Science Park (404.6ha), Bukit Tengah (242.8ha), Mak Mandin (101.1ha) and Seberang Jaya (80.9ha).

Only the newer Batu Kawan industrial park and Penang Science Park are not fully occupied, with occupancy rates of about 60%, investPenang said.

“We expect the three (PSR) islands’ proximity and connectivity to Batu Kawan (via the Second Penang Bridge) to also create an ecosystem that brings further development to the mainland.

“There is no right or wrong but as an investor-friendly state, we will try to fulfil investors’ requests as much as we can, to avoid losing out to our competitors,” the agency said.

Planning ahead

Although it is “premature” to talk about which companies have been earmarked to set up shop on Island A, investPenang said the state must always plan for the future.

“If Penang was afraid to change 50 years ago, we would not have Bayan Lepas today. The Penang we see today would not be what it is.”

Before the 1970s, Penang’s economy depended on traditional sectors like shipping and entry-port trade. When the state lost its free-port status in 1967, the state fell into deep recession and suffered from high unemployment.

Under second chief minister, the late Lim Chong Eu’s leadership, the economy revived through industrialising Bayan Lepas, where E and E multinationals set up factories. Penang was later nicknamed the “Silicon Valley of the East”.

The state depends heavily on the manufacturing sector today, which contributes 45% to its gross development product (GDP). The sector also created 300,000 jobs for Penang in 2017.

Game-changer

PDC’s Bazid believes that, like Bayan Lepas almost 40 years ago, the PSR can be a game-changer for the state’s future industrial growth.

“Island A will offer investors lower entry capital for industrial land that provides the highest standard of comprehensive development in a preferred location,” he said.

With businesses and industries embarking on IR 4.0, investPenang said manufacturing activities would not be the sole focus on Island A, as Penang looks for high quality investments that require skilled workers.

“We are no longer keen on manufacturing investments involving low technology and (that are) labour intensive,” the agency said.

“It is Penang’s ambition to be a smart city, a place to invest, work, live and play.

“At PSR, we will also have smart mobility, whereby the three islands will have a complete transportation system,” it said, referring to the plan to link the islands with a light rail transit (LRT) line.

“Residents may not even need cars to travel around the islands.”

Bazid also said PSR’s development should emphasise on the industrial and services sectors that will provide high-income jobs.

“If necessary, the state government should establish a local authority to control, manage, regulate and supervise the islands in line with its own policies,” he said.

The PSR project, which funds the state’s ambitious Penang Transport Master Plan, was recently presented to the National Physical Planning Committee, which has agreed to its implementation. It has yet to pass the environmental impact assessment (EIA) stage.

The EIA report will be displayed at selected public areas for a month beginning today to gather feedback from the people before it is submitted to the Environmental Department for approval. – April 29, 2019.