The Penang state government plans to auction a six-acre plot of land along Gurney Drive in George Town, aiming to raise more than RM300 million to support the completion of the delayed Air Itam bypass project.
The land, identified as Plot 7A in Tanjung Pinang Town, is located along Jalan Peter Paul Dason, connecting Gurney Drive to Andaman Island.
According to the state government gazette, the public auction was scheduled for 7 October 2026 at Komtar, with a reserve price of RM1,200 per square foot. Vacant land in the surrounding area is currently valued at more than RM1,000 per square foot.
Sources cited by The Edge indicated that the land sale could generate over RM300 million, with the proceeds expected to help project concessionaire Consortium Zenith Construction Sdn Bhd (CZC) complete the bypass.
The RM851 million project, known as Package Two of Penang’s undersea tunnel and paired roads development, covers approximately six kilometres. It will connect Lebuhraya Thean Teik in Farlim to the Tun Dr Lim Chong Eu Expressway through elevated roads, tunnels and ground-level routes.
Construction began in February 2021 after several years of planning and approvals, with the project initially targeted for completion in 2025.
However, progress has been affected by land acquisition delays and financial challenges faced by the concessionaire.
In May, Penang Chief Minister Chow Kon Yeow clarified that the construction contract was awarded in 2020 and that physical work only began in 2021, despite the project having been discussed since 2012.
He also acknowledged that the concessionaire had experienced financial difficulties, which contributed to slower construction progress.
Chow dismissed the Covid-19 pandemic as an ongoing justification for the delays, stressing that the project must move forward.
The project was granted its first extension of time in 2023 due to land acquisition issues, moving the completion deadline to 31 October 2026.
A second extension was subsequently approved, setting a new completion date of 12 April 2027.
Penang state executive councillor and Paya Terubong assemblyman Wong Hon Wai recently reported that construction had reached 91% completion.
In a Facebook post, Wong said the contractor had assured him that the project would be completed by April 2027.
However, he also highlighted that progress at certain sections remained unsatisfactory and called for further intervention from the state government to ensure timely completion.
The bypass forms part of a larger infrastructure initiative introduced in 2013, when CZC was selected through an open tender to develop an undersea tunnel and three major bypass roads on Penang Island.
The consortium was established as a joint venture between Beijing Urban Construction Group and local company Zenith Construction Sdn Bhd.
Under the original arrangement, the Penang government granted the consortium development rights over approximately 45 hectares of land at Gurney Bay in exchange for infrastructure construction, rather than financing the project through toll collection.
Federal environmental approval for the three bypass roads was obtained in 2017, followed by an agreement for the second package of works in 2019.
Although a groundbreaking ceremony was held in November 2019, actual construction only commenced in February 2021.
Once completed, the bypass is expected to significantly improve connectivity between Air Itam and the coastal expressway, potentially reducing travel time to approximately five minutes.
The proposed land auction represents another effort by the Penang government to address the project’s funding challenges and accelerate completion of the long-awaited road connection.
