By Stephanie Jacob
Economists are questioning the economic viability of building a bridge from Teluk Gong in Malacca with the port of Dumai in Sumatra across the Straits of Malacca, after it emerged that the plan which was first mooted in 1995, could be revived.
“While there is no specific feasibility studies to reference, available data in terms of population size, economic capacity of the Indonesian people in the Dumai area and the prospect of substantial capital investment, makes the project’s viability quite questionable,” said RAM Holdings group chief economist Yeah Kim Leng.
The project was first suggested in the mid nineties, under then prime minister Dr Mathathir Mohamad, but shelved when the Asian Financial Crises hit. In the later years of the 2000s, the project came up every once in awhile; in 2006 and again in 2009 then Malacca chief minister Ali Rustam broached the subject, but again it never took off.
It is estimated that the 48km plus bridge from Teluk Gong in Malacca to Pulau Rupat (the closest connecting point) will cost approximately RM44.3 billion, and at this length is will be the longest sea crossing in the world. From there, a 71.2km highway across Pulau Rupat will connect the bridge with the port city of Dumai.
Yeah highlighted that funding the project will be a major issue, as either public or private investment will come with its own set of concerns.
Although the Export-Import Bank of China (EXIM), have indicated in the past that it would be willing to invest substantially in the project, Yeah says that the are still long term cost issues. He notes, “even if the EXIM bank funded the project, there is the issue of repayment, which will be substantial…is there really a sufficient amount of traffic to be able to pay it off and at what rate (toll rate)?…it is likely that the governments will have to step in to top it up (repayment costs).”
In the event, that the government decides to fund the project, then the question shifts to the multiplier effects to make it worthwhile, said Yeah. He questions if there are better projects to spend the money on, especially in view of the government’s recent announcements that it will be sequencing mega projects, to prioritise those with high multiplier effects and low import content.
Yeah Kim Leng
“For me, I think the government will want to look at projects that it know will have more of an impact, like the High Speed Rail link to Singapore,” said Yeah.
As the bridge will be across the busy Straits of Malacca, which is the world’s busiest shipping lane, there are other economic and serious safety concerns to consider, said Yeah. In essence we will be building a bridge with questionable economic viability, over a world important shipping lane that carries traffic through our ports, he adds.
His views are largely seconded by the Marine Institute of Malaysia (MIMA); which in 2009 issued a report entitled “A Bridge Too Far? An Analysis of the Proposed Bridge Across the Straits of Malacca From a Maritime Perspective” – which highlights the impact the bridge could have on shipping, safety and the environment.
When approached yesterday, in lieu of comments, MIMA officials directed attention to the report, saying that many of the issues highlighted in it, were still of paramount importance.
With regards to shipping, the report said that “it is certain that the construction of the bridge would hamper the safe movement of ships in the Straits…traffic flow in the Straits, one of the world’s busiest sea lanes, would be adversely affected.”
Citing the amount of traffic, and the varied sizes of vessels traversing the straits, the report says navigational, speed and clearance (the distance between the ship and the bridge) issues are all serious concerns.
The report points to the bridge over the Oresund Sound which connects the city of Copenhagen in Denmark and Malmo in Sweden by road and rail as reference point for the issues that will need to be addressed. It highlights that during the construction of the bridge, the shipping community and neighbouring countries such as Germany protested its construction over fears that it might impede the shipping flow.
As a result a portion of the crossing was converted into an underwater tunnel allowing for bigger ships to navigate across it. The modifications resulted in the initial budget expanding by almost three times of what was expected.
MIMA also highlights that there are environmental concerns to factor in, first being the ecological systems in and around the Straits. Noting that among others, the bridge will be built near to Padang Kemunting which is an important nesting area for hawksbill turtles or penyu karah, one of the four species of turtles which nest in Malaysia.
There are also fears that the bridge will change the hydrology of the Straits, as the presence of pillars supporting the bridge could alter the speed of currents. MIMA also highlights the possibility of earthquakes, and dangers posed should the bridge take a direct hit and partially or fully collapse. .
Importantly, the report also says that the impact on maritime trade and traffic could be substantial as ships might choose to avoid the dangers posed by the bridge and travel across other shipping lanes, directly affecting the traffic that would go through Malaysian ports along the Straits among others. “Less shipping lines going through the Straits would be bad for the business of ports along the sealane and maritime service providers in the region servicing those ships. Road transport’s gain from the bridge would be the maritime sector’s loss.”
With that in mind, the question that will need to be answered is, will the trade coming from road transport across the bridge, be enough to account for potential losses in maritime trade and give the proposal some measure of economic viability?
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