Penang’s Air Itam bypass remains on track for completion in 2027 through contractor financing

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Air Itam Bypass Project to Be Completed in 2027

Highlights

Consortium Zenith Construction Sdn Bhd needs an additional RM50 million to complete the Air Itam bypass project, which is scheduled for completion before April 2027.
Project financing remains stable despite the failure to sell the Gurney Bay land in the bidding exercise, with the options of selling it to a third party or developing it directly through CZC.
The elevated U-turn ramp on the Tun Dr Lim Chong Eu Expressway by IJM Land Bhd, now 18.56% complete, is targeted for completion in April 2027 at the same time as the bypass to improve traffic flow.

This article was translated from the original. Read the original version by our correspondent here.

Project progress and financing arrangements

As reported by The Edge Malaysia, Penang Chief Minister Chow Kon Yeow said the remaining work on the project was continuing through contractor financing, with Consortium Zenith Construction Sdn Bhd requiring about RM50 million more to complete the entire construction project.

He said project financing was not affected even though some of the Gurney Bay land allocated to fund the project through the land-swap mechanism had not been sold in a recent bidding exercise. He said the land could be sold to a third party or developed by CZC itself, depending on the contractor’s decision. The state government was also prepared to transfer the land to CZC or a company nominated by the contractor, in line with the land-swap arrangement.

Chow said the main works, including the bridge and viaduct structures, had been completed, while follow-up works such as connecting the parapets and installing new Jersey barriers were under way. Paving work is scheduled to begin at the end of this month, with all related works to be completed before April 2027.

Road network impact and simultaneous opening target

Meanwhile, Chow said the construction of an elevated U-turn ramp on the Tun Dr Lim Chong Eu Expressway by IJM Land Bhd, which is now 18.56% complete, is also targeted for completion in April 2027 so it can open at the same time as the bypass.

The facility will allow vehicles heading towards the bridge to use the elevated U-turn route, providing a smoother travel option. The Package 2 project is the state government’s first project under the Penang Transport Master Plan, directly connecting Bandar Baru Air Itam and Farlim to the Tun Dr Lim Chong Eu Expressway.

Once completed, the new route is expected to shorten travel times and reduce congestion on existing routes via Green Lane and Jalan Masjid Negeri.

In our previous coverage of the 2027 Budget debate on the use of GLCs/GLICs to finance non-commercial projects, we highlighted concerns that this approach could undermine these entities’ core mandates and investment capacity without a government repayment guarantee. We also discussed proposals to require written instructions, full-cost calculations and annual disclosures for every commitment, to better control risks to contributors, depositors and retirees.

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