Penang signs agreement with Rayston on Bagan Ajam coastline reclamation project

The latest supplementary agreement between the Penang government and Rayston Consortium (Butterworth) Sdn Bhd (RCSB) has been inked yesterday to enable the company to continue its obligations as stipulated in the 1999 concession agreement, in line with the policy amendments to this supplementary agreement.

This supplementary agreement also provided a clearer picture of the management and ownership of the project.

Chief Minister Chow Kon Yeow, who witnessed the signing ceremony in Komtar, said the Land Reclamation and Resettlement Agreement (LRRA) was initially inked in 1999 between the Penang government and RCSB.

It was reported that the LRRA was made following the concession agreement between the Federal Government and Lingkaran Luar Butterworth (Penang) Sdn Bhd to build, operate, manage, and maintain the Butterworth Outer Ring Road (BORR).

Based on the terms set by the Economic Planning Unit of the Prime Minister’s Department at that time, Lingkaran Luar Butterworth (Penang) Sdn Bhd was a ‘special purpose vehicle’ and could not execute other functions other than to build, operate, manage, and maintain the BORR.

Therefore, as reported, a separate agreement (the LRRA) was made to carry out the land reclamation and relocation of the affected ground tenants due to the BORR project. As compensation, RCSB was given the rights to reclaim, and develop the reclaimed land from Bagan Ajam to Teluk Ayer Tawar.


Approximate location

“The LRRA specified that RCSB was to reclaim 650ha of land, of which, 407ha of land was allocated for mixed development while the remaining 243ha was allocated for the Penang Port Commission (PPC) for port purposes and activities.

“Meanwhile, RCSB is no longer given the responsibility as a concessionaire for the reclamation of areas for ports and port activities amounting to 243ha. Twenty-six hectares of land from the 243ha which was set aside for PPC have been used as the North Butterworth Container Terminal (NBCT). The Penang government will hold further discussions with PPC for the implementation of reclamation planning in the area.

“A supplementary agreement was signed on Sept 28, 2018, which stated the time frame for RCSB to implement the project and enabled the Penang government to gain additional land, totalling 90ha, as compared to the original agreement inked in 1999,” Chow said before the signing ceremony.

He added that the master plan to reclaim the 407ha of land from Bagan Ajam to Teluk Ayer Tawar by RCSB was approved during the State Planning Committee (SPC) meeting on Sept 30, 2019, and later confirmed on Oct 24, 2019.

According to the latest development, on March 30 this year, the Penang executive council (exco) meeting approved and confirmed (on April 6) RCSB’s concession areas. The total size amounted to 582ha.

Chow mentioned that of the amount, 90ha of land would be surrendered to the Penang government, a land replacement of 10ha for the state government, 272ha of land would be surrendered for public facilities, and the remaining 210ha would be for RCSB.

“The latest supplementary agreement outlines the completion period of the amendment to the master plan with the approval of the state authority within 18 months from the effective date of this supplementary agreement, which is June 1, 2022.

“Following that, RCSB must complete the reclamation project within six years after obtaining the relevant approvals and the state will receive a return of 90ha of land,” he said.

Source: Buletin Mutiara

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