What Could Happen If Malaysia Builds Three More Islands

Wade Shepard Forbes 25 May 18;

Fisherman Haji Rossli looked out across the bay, but could hardly fathom what could soon be built there. "Surprised? No, we were shocked," he told me when I asked what his reaction was when he first learned of the plan that calls for his remote fishing village to be transformed into Malaysia's next outpost of progress. Three manmade islands are set to be constructed where there is only sea today, upon which a new smart city, industrial zone, and transportation hub will be built.

The Penang South Reclamation (PSR) Project

It is called the Penang South Reclamation (PSR) project, and is, in and of itself, nothing unusual in the context of 21st century Asia--a region that is urbanizing so rapidly that the creation of another new city, another new dot on the map, hardly makes its way into the international news stream. Perhaps just as typical is the fact that this new city is set to be constructed on land reclaimed from the sea, a development strategy that has taken on bonanza-like proportions across the region in recent years.

The PSR is one of the more ambitious land reclamation projects for urban development in the world today. An estimated 189 million cubic meters of sand and rock are set to be hauled in from the Malaysian state of Perak to make artificial islands measuring 9.3, 4.45, and 3.23 square kilometers, respectively. These new islands are designed to flow within the natural contours of the coastline, neatly filling in three bays and extending the reach of Penang farther out to sea.

However, unlike other reclamation projects in Penang—which have seen new coastal extensions and artificial islands created for luxury high-rises and shopping malls—the Penang South Reclamation project is slated to be a fundraiser for the Penang state government’s ambitious new transportation masterplan. Essentially, the government plans to take out a bridge loan to pay for their long-awaited project on the contingency that they will be able to repay it via selling the new land to developers.

The Reclamation Bonanza

Traditional fishing village beneath the new luxury high-rises of the STP 1 project in the north of Penang.

“The majority of the people live nearby the water and most cities are located nearby water—water is life and always has been the center of economic activities,” summed up Kees-Jan Bandt, the CEO of Bandt Management & Consultancy, who has in-depth experience with reclamation projects around the world.

New cities built on reclaimed land have become one of the hottest trends in urbanization, providing what amounts to a developmental magic act: government officials can virtually point their fingers out to sea, say "voila," and a blank slate of prime positioned, high-value real estate almost instantly appears. Over the past decade, countries throughout Asia have been reclaiming land en masse:

Cities on China’s coast reclaimed an average of 700 square kilometres of land–that’s about the size of Singapore–from the sea every year from 2006 to 2010 for new houses, industrial zones and ports. The 130 sq km of land that was reclaimed to build the new city of Nanhui was significant enough to reconfigure China’s national map, and the reclaimed land for the Caofeidian economic zone was twice the size of Los Angeles.

Malaysia has massive reclamation works under way for the 700,000-person Forest City in Johor; the Philippines is reclaiming 1,010 acres from the sea for its New Manila Bay – City of Pearl; Cambodia is building a slew of Chinese-financed properties on reclaimed land; Dubai has turned reclamation into an art form; and Sri Lanka is building a new financial district on the dredged and deposited land of Colombo International Financial City. Around a quarter of modern-day Singapore was open sea when the nation state came into existence in 1955.

This new construction land becomes a wild card for governments and developers — they get blank slates of land to develop without the hassles and expenses inherent to relocating people, settling with existing land owners, and redeveloping an already established area.

Big profits

This is where one of the new islands for the Penang South Reclamation (PSR) will be constructed.

The economic incentives for reclaiming land are clear: according to Ocean University of China professor Liu Hongbin, the immediate profit from selling reclaimed land in China can fetch a profit in the ballpark of 10- to 100-times the cost of producing it.

The environmental impact

While there are economic benefits to developing this underutilized stretch of Penang, the local fishermen are worried about the impact on the local maritime ecosystem and, by extension, fear for their livelihoods.

“In this area there is a lot of plankton, a lot of fish and prawn come here,” Rossli explained as he pointed out to the bay. “What will happen to them when they build this project? Maybe they will go to other places.”

His fears are not unfounded, as there are already examples around Penang of what his fishing grounds could soon become. Massive reclamation projects have been happening here since 1975, as the island rapidly grows not only economically but physically as well. In the east, a massive reclamation project saw a new highway and commercial and residential strip appear. In the north, the controversial Seri Tanjung Pinang (STP) project has moved into its second phase, decimating the local fisheries and debilitating the nearby villages which depend on them.

“Before, there were many fish. Now, nothing,” fisherman Mohd-Ishak Bin Abdul Rahman told me previously about the plight of Tanjung Tokong, his village which now sits in the shadows of the mostly vacant luxury condos that were built on reclaimed land at STP 1.

“In terms of impacts to the local community, it has affected the local fishermen the most,” explained Mageswari Sangaralingam, a Penang-based research officer for Friends of the Earth Malaysia. “The reclamation projects have resulted in loss of fishing ground and project activities will adversely impact marine life, the fisheries sector, and thus the livelihood of the fisher community.”

She added that the numerous reclamation projects around the periphery of Penang has changed the island’s coastal hydrology and geomorphology.

“[The environment] will change, it will change,” Rossli lamented. “They will take material from another country and dump it to make an island… So it's not suitable for the fish.”

If Penang’s STP project in the north is a model to go off of, Rossli's fears are warranted. The local crab population there was decimated by mud that the fishermen believe came from the reclamation site.

“The fishermen don't like our project because they say our project is a threat,” Rosmady Mat Abu, who works for the consortium looking to develop the PSR project, told me when I met him on site. “But we do a survey [and found that] the fish is not around this area, only 30%.”


However, for Haji Rossli and many of the other fishermen of Permatang Damar Laut, losing a full third of their fishing grounds to the new islands is significant.

“If the place is still like it is right now everyday we can go and fish there and get some money,” Rossli explained. “If they make an island there it will be difficult for the fishermen, and in the market the price of fish may rise up higher and higher. How am I going to support my family?”

“As fishermen point out, not only the fishes are becoming extinct, even fishermen will soon be extinct as they lose fishing grounds,” Sangaralingam added.

These environmental concerns are real -- so much so that earlier this year Beijing put an end to all reclamation projects not backed by the central government.

Conclusion

Land reclamation in Penang—as well as in other parts of Malaysia—has become a politically contentious strategy for development. With Mahathir bin Mohamad back in power as the country's new prime minister, his administration's intentions for the PSR project still remain to be seen. Although it has not gone unnoticed that Mahathir's ten main government ministries conspicuously lacks one charged with protecting Malaysia's environment.

Wade Shepard is the author of Ghost Cities of China. Traveling since '99. Currently on the New Silk Road. Read my other articles on Forbes here.