Penang Chief Minister Chow Kon Yeow says the reclamation project will create a new waterfront for Bagan Ajam area in Butterworth. — Picture by Sayuti Zainudin

GEORGE TOWN, Sept 28 — The state government signed a supplementary agreement with Rayston Consortium (Butterworth) Sdn Bhd to reclaim 650ha of land off the northern part of Seberang Perai.

The signing of the agreement will push Rayston to start the reclamation project that was delayed since it first signed the deal in 1999.

“The reclamation project will create a new waterfront for Bagan Ajam area in Butterworth,” Penang Chief Minister Chow Kon Yeow said after the signing ceremony today.

He said the reclaimed land, which will be near the proposed undersea tunnel, will benefit the whole of northern Seberang Perai and Butterworth.

“With the tunnel, it will create direct accessibility from Gurney Drive on the island to Bagan Ajam area,” he said.

Rayston initially signed the land reclamation and resettlement agreement (LRRA) with the Penang state government at the time on June 16, 1999.

The company was given the right to reclaim the land in exchange for relocating squatters and residents affected by the construction of the Butterworth Outer Ring Road (BORR).

However, Rayston did not start reclamation works after the signing of the agreement.

Rayston director Datuk Ronnie Lim said they had not been able to start the reclamation due to the resettlement of 1,700 residents affected by BORR.

Today, in the supplementary agreement, Rayston was given six months from today to submit the necessary applications for approvals to begin work including obtaining Environmental Impact Assessment (EIA) approval.

On the costs of the reclamation works, Lim estimated it to be around RM2 billion.

Chow said the supplementary agreement added new clauses to the 1999 agreement in which Rayston will hand over 35 per cent of the reclaimed land, about 90.31ha, to the state government.

In the original 1999 agreement, 243ha of the reclaimed land would have gone to Penang Port while only five per cent or 12.9ha had been allocated to the state government.

“There was no time frame fixed for handover of land in the original agreement, so we fixed a time frame in this agreement and we also fixed a schedule of implementation so that the timeline can be adhered to,” he said.

Rayston will have six years from work commencement to hand over the 90.31ha of reclaimed land to the state government.

Lim confirmed that they planned a mixed-development model for the reclaimed land.

The state government will look into the development by Rayston on the reclaimed land before it look into development plans for the 90.31ha of land.

Chow said the state will likely consider building residences on the land.

He hoped Rayston will be able to start the project soon without further delays.