Entrusting the future vision of Penang to an untested consortium seems like a recipe for disaster, warns a Concerned International Banker.
Open appeal to the new Penang chief minister
Dear Chief Minister Chow Kon Yeow,
Let me at the outset state that I have the utmost respect for you and I thank you for welcoming open discourse on the Penang transport masterplan. As a Penangite and a supporter of yours, this is my open appeal to you to pause and rethink the plan as follows:
The relevant Penang Island and Seberang Perai structure and local plans (2020-2030) need to be reviewed before committing to transport investments that will have an irreversible, long-term impact beyond 2050.
Penang needs a long-term vision that is articulated into spatial plans and specific land use initiatives that are integrated with transport and other infrastructure investments.
Equally important are a robust institutional framework, regulatory and planning tools, governance arrangements and civil service talent for effective implementation of these plans.
Penang sorely lacks these currently as can be seen by the increasing congestion, flooding, environmental degradation, unsustainable urban sprawl, haphazard development and inequitable property prices.
The structure plan and local plans are crucial in integrating transit-oriented development and land-use planning and urbanisation. In this regard, the proposed three reclaimed islands with smart cities occupying an estimated area of 4,500 acres should be incorporated into the structure and local plan process.
With the overwhelming mandate that the Penang voters have given you, please use this opportunity to institute an inclusive planning process that reflects the aspirations of Penangites of all backgrounds for a sustainable, socially inclusive, desirable future for Penang.
An independent expert panel can help review the road investment proposals based on the principles of transit-oriented development.
The efficacy of the Penang transport masterplan is only as good as the quality of forecasts on population growth and residential density, land use patterns and development density arising from economic activity, trips generated, modal split and travel patterns based on predicted travel behaviour.
Current transport planning models are increasingly sophisticated using big data analytics leveraging data from mobile devices and social media, artificial intelligence applications and behavioural economics approaches. The Halcrow study does not benefit from any of these innovative techniques.
The recommendation to invest in more road capacity through the three new highways, the undersea tunnel and the three new bypasses will generate more induced traffic and undermine the vision of transit-oriented development for Penang.
Transit is a means to help create desirable patterns of urban growth and reduce the carbon footprint while enhancing the convenience, comfort and safety of users. Ttransit systems thus need to be harmonised with land use patterns in sustainable ways.
I urge you to establish an expert panel to reconsider the proposed highway investments. Using the internal rate of return (IRR) as the only criteria for prioritisation of investments is a flawed approach.
The procurement approach adopted to date has not delivered the world-class planning expertise which is required for a sustainable Penang transport masterplan.
I know of no other public entity in the world that has used the Request for Proposals procurement method to select a project delivery partner for an estimated RM46bn (US$11.5bn at current exchange rates) investment of the scope and ambition of the SRS proposal, which has significant, complex and multi-generational impacts.
Firstly, a project delivery partner is used only for relatively small (in comparison), well-specified projects with very clear deliverables and timelines when the public contracting authority does not have the technical/financial capacity to implement these projects.
In the case of the Penang transport masterplan, the Request for Proposal objectives are exceedingly broad, vague and complex. As such, costs and risks are near impossible to estimate for any reputable bidder. Therefore, a fair and robust comparison of technical and financial proposals amongst different bidders is certainly impossible (with all due respect to KPMG).
Furthermore, there is confusion between the roles of the state government and the project delivery partner in terms of accountability for planning functions and, under the current arrangement, a near abdication of the roles and responsibilities of the state government – which is clearly undesirable.
The state government needs to focus on establishing consensus on critical and urgent steps to formulate, implement, manage, monitor and enforce integrated land use and transport plans especially with the recent dissolution of the Land Public Transport Commission (Spad).
Given the scale and ambition of the proposed investments, a new state transport unit needs to be established with the required expertise, resources and mandate to ensure that the public good is not compromised by the profit incentive of a private project delivery partner.
SRS Consortium has no demonstrated experience or expertise in delivering an ambitious integrated transport masterplan.
Again, with due respect to the state government and KPMG, the capabilities of SRS Consortium, which consists of Gamuda Bhd, Loh Phoy Yen Holdings Sdn Bhd and Ideal Property Development Sdn Bhd, as a project delivery partner are not evident.
None of the consortium members have demonstrated experience or expertise in implementing an integrated transport plan on a scale such as the Penang transport masterplan as they are either engineering or property companies experienced in delivering infrastructure projects or developing real estate.
They clearly do not have the requisite world-class expertise in implementing sustainable, integrated transit and land-use plans. Entrusting the future vision of Penang and the quality of life of our children and grandchildren to an untested consortium such as SRS seems like a recipe for disaster.
I would urge you to review the contracting arrangement with SRS Consortium and instead formulate a plan to establish a state transport unit with expertise in managing public-private partnership (PPP) projects such as the transport masterplan proposals.
Along the same lines, I would also urge you to revisit the arrangements with Consortium Zenith.
Concerned International Banker is the pseudonym of an individual attached to an international financial institution.