Anil Netto tells us why it would actually be good news if the federal government does not provide a bridging loan for the massive Penang transport plan.
The reported ‘bad news’ that a bridging loan for phase one of the controversial RM46bn Penang land reclamation and transport plan may not be forthcoming from the Pakatan Harapan (PH) federal government would actually be good news for Penang.
The lack of a federal bridging loan would make it more difficult for the mega Pan Island Link highway and the single-route elevated light rail transit to proceed: the project proponents were obviously relying on this loan to provide the capital for the construction.
The Penang chief minister later said it would be premature to talk about a bridging loan when key approvals for phase 1 of SRS Consortium’s massive land reclamation and transport mega plan had not yet been received. His statement came after the consortium maintained the state government should stick to the proposal for the state to cough up RM1bn in public funds as a loan.
There are five compelling reasons why holding back any bridging loan approval would be wise and prudent.
1) A mega highway would aggravate climate change. Building a new mega highway would result in induced demand for highway use, thus increasing emissions from vehicles in the years to come. And so the possibility that the bridging loan might not be forthcoming would be good news for those who participated in the global Youths Strike for Climate protest. Incidentally, Penang was the only state where youths gathered in solidarity with the global event, calling for greater ecological protection.
2) The proposed Pan Island Link is at best only a temporary solution. It would ease congestion for five to seven years – only for the problem of congestion to return with a vengeance beyond that. In any case, it would not solve congestion along the approach and exit roads leading to and from the highway.
3) A loan from the PH federal government would have meant dipping into public funds to provide capital for the project. This is repugnant given that the so-called PTMP financing model was largely based on not using public funds (although a “bridging loan” from the state was mentioned in the proposal).
The federal government is already operating on a tight budget after being saddled with RM1 trillion in debt left behind by the irresponsible Barisan Nasional government. It would be similarly irresponsible of the PH government to provide a RM1bn loan as seed capital for an unsustainable highway project and expensive single-line LRT project (with an inflated ridership projection). If these projects are so viable, why don’t the project proponents get a bank loan at commercial interest rates or inject their own funds. Why borrow from the public?
After all, the Edge Financial Daily (19 March 2018) reported that Gamuda Bhd, which has a 60% stake in SRS Consortium, “may potentially receive strong cash injections from the proposed disposals of tolled roads under its portfolio to the government”. But the paper expressed doubt that Gamuda would be willing to put in its own funds given the political uncertainties and heightened risks after the 2018 general election.
What’s more, as this project is supposed to be toll-free, who is going to pay for the annual maintenance of the highway and tunnels, which will run into tens of millions of ringgit annually?
4) The highway would be environmentally risky, especially as it would be built along environmentally sensitive hill slopes and close to a hill-side dam. It would also terribly degrade two popular green lungs where many people go for exercise and recreation. The six lanes of traffic would add to noise and air pollution for nearby schools, homes and places of worship along the route.
5) Withholding the bridging loan would prompt the state government to take another look at the more sustainable mobility options put forward in the original Halcrow transport masterplan, which would cover the whole state at a fraction of the present extravagant RM46bn proposal.
If the earlier report about the bridging loan not being forthcoming had any basis, the PH federal government would have made a wise decision. But that is just a small step.
The federal authorities (the Department of the Environment and the National Physical Planning Council) should now take a careful look at the huge environmental footprint of these projects and consider how the massive land reclamation will jeopardise the livelihoods of thousands of fisher folk. It should then make more wise decisions for the long-term benefit and food security of the people of Penang by not approving these damaging and unviable projects.