Penang South Islands: Creating the City of the Future

The state of Penang has been associated with industrialisation and now its government intends to develop Penang South Islands (PSI) as the way forward.

According to Penang State Executive Councillor (EXCO) for Infrastructure and Transport, Zairil Khir Johari, these three islands located to the south of Penang have a span of over 4,500 acres and will be the future of the state for the coming 30 to 50 years.

Speaking at the recent World Congress on Innovation and Technology (WCIT) 2022 media roundtable session for PSI, held at Setia SPICE Convention Centre, he told the media present that the first of the three islands will be Silicon Island.

Starting out, Silicon Island, also known as Island A, will be a smart city with a mix of high-tech manufacturing, research and development hubs, and also a belt for Global Business Services (GBS) that the EXCO said will create a dynamic ecosystem ideal to create high-value jobs for the masses.

“The main priority for PSI is to create high value jobs because it will bring everything else with it,” he said.

In order to attract high quality GBS and Multinational Companies (MNCs), he stated that after engaging with industry players and foreign investors, one of the main criteria for these companies is to have great ESG practices.

With that, he explained that the PSI will fully integrate ESG, starting with Island A with the remaining islands to follow suit; something which its delivery partner – SRS Consortium Sdn Bhd – have incorporated into when designing the islands.

“The strategic approach to achieve this objective will emphasise on building the right infrastructure to cater to the needs of the E&E industry while concentrating on realising our carbon-neutral ambition,” he said.

Furthermore, he said that even the Small and Medium Enterprises (SMEs) and banks that are looking to be a part of the PSI should fulfil the ESG criteria as industries today highly value ESG practices.

“These are also the sort of companies we are looking to attract due to their high value as we are looking to create sustainable development for Penang in the next 30-50 years,” he stated.

Apart from that, he added that the state government hopes that the PSI would also be a tourist attraction and be the balance that makes Penang a smart city as well as a heritage location for all.

Penang South Island (PSI) — Silicon Island, or Island A, will be the first to be developed and will feature the Green Tech Park as a key catalyst for the E&E industry.

From humble beginnings

Penang started out as one of Malaysia’s poorer states after the country was formed, up until 1969, when the state decided to transform and revamp its economy through industrialisation.

There was a large transformation following the state’s leap to embrace industrialisation, which brought in MNCs to drive the economy and turned Penang into one of the highest GDP income states for Malaysia at present.

After 50 years, Zairil said that despite still being an attractive investment destination for foreign investors, it has reached a point of saturation due to the lack of land that Penang has always struggled with.

However, he said that the PSI is the way forward for the state, as they are merely adapting the same model that was previously used and applying it to the project.

Also during the media roundtable session, Penang Infrastructure Corp CEO Datuk Seri Farizan Darus said that the PSI will provide jobs for those within the research and development (R&D) and high tech industries, although there will also be opportunities for other jobs when the development starts.

“To also secure jobs within this sector for future generations, we have set certain activities in motion such as tuition for students, especially those located in the southern part of Penang. This will not only accommodate the labour requirements for PSI, but it will also allow Penang to retain its future talents and attract more talent from the country and beyond,” he added.

Presently, the PSI project is awaiting its Environmental Impact Assessment (EIA) approval, but the timeline for the development is expected to begin as early as November or December this year starting with the reclamation phase.

SRS Consortium Sdn Bhd Project Director, Szeto Wai Loong, said that the manpower needed for this project would likely be in a range of 8,000 to 9,000 workers, although it would be divided into different phases.

Szeto also stated that although the total gross development value for the three islands are yet to be confirmed, the first phase of reclamation and infrastructure costs is estimated to be around RM4 billion.

The second phase would also include ESG criteria in the mix and is estimated to be another RM3 billion, bringing the total construction cost for Silicon Island to an estimated RM10 billion.

Zairil emphasises that the works will only begin after EIA approval has been granted, and if there are no delays, aims for the first phase of the green tech park to be completed by 2024.