Project Overview
The Penang Bay Project is a 30-year ambition to transform the Penang island and mainland waterfronts, and deliver a new city core based on innovation synergies between technology and creativity. The project envisions investment in smart infrastructure to leverage underutilised cultural and transport assets to catapult the state towards high-income status, with improved mobility and resilience.
Sectors
- Affordable Housing
- Transport & Mobility
- Urban Infill & Public Space
US$1,100,000,000
Funding Goal
Malaysia
Country
Asia and the Pacific
Region
Objectives
The primary objective of the project is to create a new, resilient city core for Penang to stem urban sprawl and provide world-class waterfront assets that are able to leverage Penang’s cultural and high-tech manufacturing traditions and create synergies that consolidate the state as a global innovation hub. This will be achieved by:
– Creation of a new city core to stem continued urban sprawl, towards sustainable urbanisation.
– Activating underutilised heritage assets and poorly performing port infrastructure.
– Improving connections between the island and the mainland to enhance synergies (i.e. taking the Hong Kong – Kowloon model as an example).
– Creating additional employment and business opportunities as well as improved amenities to improve quality of life.
– Futureproofing the coastal areas of the island and mainland to ensure that they are less vulnerable to the impacts of climate change and the subsequent social, economic, and environmental consequences.
Progress Tracker
Phases
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Phase 1
(Completed)
Development on the mainland comprises a new integrated rail and bus transport hub, shopping centre, and hotel. Development on the island consists of conservation of the old fort in the George Town UNESCO World Heritage Site, a new passenger cruise terminal, and upgrade of public realm (esplanade, seawall, gardens) on the northern waterfront.
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Phase 2
The mainland will involve repurposing existing port infrastructure, the rehabilitation of petrochemical storage facilities, and relocation of informal settlements that are vulnerable to climate change. For the island, Phase 2 will consist of rehabilitation of the eastern waterfront heritage warehouses, investment in a public waterfront promenade , development of a marina and new ferry terminal, and the creation of a low-rise mixed-use development.
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Phase 3
Will extend these concepts and connections between island and mainland further along the coast to the north and south of the initial components in Phases 1 and 2 (the George Town World Heritage Site on the island and the port on the mainland).
Current Stage
N/A
Timeline
N/A
Project Milestones
N/A
ESG Impact
Redevelopment of a brownfield port and industrial site that can catalyse local economic development with mixed-use development including affordable housing, retail and commercial components. Urban regeneration of the site would improve connectivity via transport links between Penang island and Penang mainland. Economic growth would be led by a new creative and innovative district for Penang state and the northern region of Peninsular Malaysia, which can be a Southeast Asia hub (southern Thailand, Sumatera in Indonesia and northern Peninsular Malaysia).
Beneficiaries
The island component of the project would offer housing, business, employment and recreational opportunities. The mainland component would generate significant economic and social dividends as well as provide housing options for communities vulnerable to climate change. Penang Bay will have an immediate impact on the core population of 300,000 people in George Town (island inner city) and Butterworth (mainland inner urban). There will be wider impact on the future 2.5 million population of Penang state as well as economic spillovers for the 6.6 million population in the northern region of Peninsular Malaysia.
SDG Goals
SDG 1: No PovertySDG 2: Zero HungerSDG 3: Good Health and Well-beingSDG 4: Quality EducationSDG 5: Gender EqualitySDG 6: Clean Water and SanitationSDG 7: Affordable and Clean EnergySDG 8: Decent Work and Economic GrowthSDG 9: Industry, Innovation and InfrastructureSDG 10: Reduced InequalitySDG 11: Sustainable Cities and CommunitiesSDG 12: Responsible Consumption and ProductionSDG 13: Climate ActionSDG 14: Life Below WaterSDG 15: Life on LandSDG 16: Peace and Justice Strong InstitutionsSDG 17: Partnerships to achieve the Goals
Rationale
SDG 8 – Decent Work and Economic Growth
The Penang Bay Project can help Penang achieve higher levels of economic productivity and growth through diversification, technological upgrading and innovation, including a focus on high-value added activities. The project will also promote development-oriented policies, supporting productive activities, higher-skilled job creation, entrepreneurship and the growth of SMEs. Additionally, Penang Bay can promote sustainable tourism and sustainable resource consumption.
SDG 9 – Industry, Innovation and Infrastucture
The Penang Bay Project can help promote inclusive and sustainable industrialisation and knowledge-based economies that draw on the IR4.0 as manufacturing and cultural industries are the two largest contributors to Penang’s economy. The Project aims to spark innovation by creating enhanced synergies between the creative and technology sectors. This also involves a combination of increasing innovation and scientific research capacity and promoting greater public and private R&D investment; and importantly developing the physical spaces, supporting infrastructure, and complementary experiences for this to occur.
SDG 10 -Reduced Inequality
The Penang Bay Project can help improve the livelihoods and quality of life for low-income and disenfranchised communities. This would reduce levels of inequality in the state and country. With compact and sustainable housing, the migration of people to Penang can be better managed.
SDG 11 – Sustainable Cities and Communities
The Penang Bay Project will help ensure improved access to quality affordable housing and provide a range of housing typologies. Improved connectivity between the island and mainland will be achieved with sustainable water and bus transport systems. Additionally, Penang Island’s tangible and intangible cultural heritage can be better protected and promoted to catalyse tourism and improve quality of life. Improved public realm and better links between the urban, peri-urban, and rural areas through better national and regional development planning.
SDG 12 -Responsible Consumption and Production
The Penang Bay Project would enable sustainable urbanisation by reducing urban sprawl, commute times and delivering smarter urban management solutions
SDG 13 – Climate Action
The Penang Bay Project components include strengthening physical and community resilience towards climate hazards and adapting to climate change, largely around incorporating nature-based systems into new development to cool urban areas and reduce stormwater runoff, and strengthen seawall infrastructure.
SDG 16 – Peace and Justice Strong Institutions
The Penang Bay Project involves an ongoing consultation process with all relevant stakeholders and communities. An effective governance and management process is being put in place to ensure effectiveness, accountability, and transparency.
SDG 17 – Partnerships to Achieve the Goals
The Penang Bay Project would require global, national, and local public-private and civil society partnerships to ensure its success.
Risks and Limitations
What are the key risks, constraints and dependencies related to the project?
- Ability to attract smart investment for project components that can truly transform Penang’s economy and catapult Penang into high-income status.
- Unknown costs associated with land contamination.
- Developing an exclusive project that fails to deliver the intended social dividends for an inclusive society.
- Climate change impact is more severe than predicted, requiring increased project costs to reinforce infrastructure.
- Poorly executed communications and consultation strategy which may lead to misinformation and unfounded stakeholder/community concerns.
Risk mitigation and continuity
There will be proper legal and governance mitigation strategies implemented.
Financing
Type of Investment
Debt
Financing Structure
Public Private Partnership
Secured Investment
Phase 1 of the Penang Bay Project has received an estimated US$100 million for the transport hub on the mainland, from a local property developer Malaysian Resources Corporation Berhad, the federal government’s investment arm Khazanah Nasional Berhad, and the Penang Port authority. For the island, US$50 mil has been contributed by the Penang state government, Khazanah Nasional Berhad, and Think City for projects including the conservation of the historic fort in the UNESCO World Heritage Site and public realm improvements. Additionally, the Penang Port authority and its partners have committed nearly US$50 million for the expansion of the cruise terminal.
Committed Government Funding
N/A
National and Subnational Investors
N/A
Committed Private Funding
N/A
Support
Technical Support Required
Technical assistance to make the project investment-ready (e.g. environmental impact assessment, social impact assessment, financial feasibility study).
Stakeholders
Governmental Buy-in
Yes. National Level, Subnational/regional level, Other.
Other Forms of Governmental Support
Phase 1 has previously received committed funding from the federal and state government. For Phase 2, while there have not been any financial commitments made yet, there is a broad consensus that the land owned by the state and federal agencies will be made available as a platform for public-private partnership.
National Ministries Involved
Federal agency: Think City (Dr Matt Benson)
SubNational Ministries Involved
State agency: Chief Minister's Incorporated (Ms Bharathi Suppiah)
Other Entities Involved
George Town Conservation & Development Corporation (Ms Bharathi Suppiah)
Licenses and Permits
NoUpdates
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10th February 2020
Cities Investment Platform in progress - updates pending
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10th February 2020
Project featured on the Cities Investment Platform, which was launched at the Tenth Session of the World Urban Forum (WUF10)
Supporting Documents
No supporting documents included.