Daily Express
Established since 1963
Offer to build Labuan bridge

Published on: Wednesday, December 04, 2013

Labuan: Shandong Laigang Gaya Sdn Bhd has submitted a proposal to the Federal Government to undertake and finance the construction of the Labuan-Menumbok bridge, an integrated entreport and later a Marina city with an overall development cost of US$20 billion (RM60b).

There would be no cash payments required from the Government but land swap. Shandong Laigang Gaya Sdn Bhd, is joint venture between Gaya House Sdn Bhd headed by former Chief Minister Tan Sri Harris Salleh.

Shandong Laigang a China-based company and part of listed Shandong Steel Construction Co Ltd.

The combined assets of Shandong and Gaya exceed RM50 billion. Shandong Construction was also involved in building China's longest 37km bridge at Jiaozhowan.

In a briefing to chambers on the proposal by Harris represented by Director of Innotech Design Architects Sdn Bhd Sim Sie Hong, under the proposal the joint-venture company is requesting the Government to alienate some 8,500 acres of sea to be reclaimed as land suitable for various types of development.

The area to be reclaimed would be on both sides of the coastline - Labuan's east coast and west coast of Menumbok. The bridge will span over the 13km channel between Labuan and Sabah.

Of the 8,500 aces requested, 4,400 acres are from Labuan's side and another 4,100 acres from Sabah's side.

Upon receiving the approval the developer would undertake to finance and construct the bridge and entreport in return for the land alienation from Labuan (3,400 acres) and Sabah (2,000) totalling 5,400 acres.

The developer would build and operate the bridge and entreport for 30 years, under build-operate-Transfer (BOT) arrangement.

Upon completion, a total of 1,000 acres would be handed back to Labuan Entreport (600 acres) CIQ complex (100 acres), Commercial (100 acres) and Nature Park (200 acres)

For Sabah 2,100 acres for various uses such as CIQ, commercial, residential, marine, golf course have been slated.

Regarding the bridge, Sim said the present traffic volume between Labuan and Menumbok was about 300,000 vehicles per year and this was insufficient to recover investment costs.

"It would take about 91 years to recover and no investor would have the finance stamina. The alternate is a land swap, toll would be collected for maintenance cost of the bridge, "he said. As for the entreport, he said it would cater mainly for containers designated to handle one million TEU's per year from present 40,000 TEUs.

Sim said Labuan had been identified since 1880 as a suitable entreport in Asia due to its large and deepwater harbour.

Although Hong Kong's Victoria Harbour was chosen as the geteway to China , Labuan's potential remains and could be tapped. It could now serve for the BIMP-EAGA concept and enjoy the "windfall" when the ownership claims over oil-rich Spratly island is resolved.

"But we must have good infrastructure such as the bridge and entreport, said Sim. He said such facilites could bring about great economic spinoffs.

"There are already oil companies wishing to expand but shortage of industrial land disabled them and affected the local economy.

The Sabah-Labuan bridge would solve the problem as Sabah could enjoy the spill-over from the growth of the oil and gas industry," he said.