Malaysia to delay infrastructure projects amid rising costs: PM Abdullah

KUALA LUMPUR: Malaysian Prime Minister Abdullah Ahmad Badawi on Tuesday said infrastructure projects under its multi-billion-dollar five-year development plan may be delayed due to escalating costs. Abdullah, who is also finance minister, said high on the casualty list is the construction of a vital second bridge linking the northern island of Penang to peninsular Malaysia.

"Several matters have delayed its construction. Firstly in getting the land for building the bridge," he was quoted as saying by Bernama news agency. "Secondly, there is a need to ensure that the given design is the most suitable and also the issue of (rising) cost," Abdullah said.

Abdullah also said that several other projects under the 200 billion ringgit (65 billion dollars) development plan from 2006 to 2010 would be reviewed.

The three-billion-ringgit (826-million-dollar) Penang bridge is part of a national development plan to boost the country's economy in the northern region.

Construction of the planned 24-kilometre (15-mile) bridge linking the town of Batu Maung on the island and Batu Kawan on the mainland was expected to be completed by January 2011 but has been hit by delays.

The construction of the bridge will be funded by the government and private investors and undertaken by United Engineers (Malaysia) Bhd (UEM), a major infrastructure player linked to the ruling United Malays National Organisation (UMNO).

UEM's foreign partner is the China Harbour Engineering Company. Abdullah last September warned a spike in global oil prices could affect the country's multi-billion-dollar development programmes.

But in the run-up to the March 2008 polls, Abdullah launched five ambitious developments corridors nationwide to spur growth and eradicate poverty.

Last week, an independent think tank said Malaysia's economy would decline in the second-half of the year due to a downturn in the US economy with growth in 2008 expected to reach 5.4 percent.

The central bank last month said Malaysia's growth is expected to slow to 5.0-6.0 percent in 2008, down from 6.3 percent last year.