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NEWS UPDATES 19 August 2009

$12.5bn bridge to connect Malaysia, Indonesia

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A Malaysian firm has proposed to construct a bridge, which will be almost four times the length of the Penang Bridge, across the Straits of Malacca at the narrowest point between Malacca and Dumai, Sumatra in Indonesia, reported Malaysian daily the Business Times.

Malaysian company SOMP has submitted the proposal, both to the Malaysian and Indonesian governments for approval, its chairman Ibrahim Zain was quoted as saying.

"We hope to secure the approval from the two governments by the end of this year or early 2010. We need to start the project as soon as possible so that we would not pay higher construction materials cost," he told reporters after a special seminar on the 48.69km-long bridge in Kuala Lumpur Tuesday.

Ibrahim said 15 percent of the funding for the project will come internally while the rest from bank borrowings. China's Exim Bank plans to support the bridge project.

"Under the bank's policy, we can provide funding up to 85 percent for such infrastructure projects," Exim Bank of China general manager Tang Yinlian said. A Chinese firm, Hunan Provincial Communications Planning, Survey and Design Institute (HNCDI), is also involved in the project.

"Exim Bank of China sees the proposed Straits of Malacca bridge as one the biggest in the world and is a far-reaching programme for Malaysia and Indonesia as well as other countries in Southeast Asia," she said.

SOMP has also proposed a joint committee at the government level for both countries to oversee security issues such as immigration and customs.

Managing director Lim Sue Beng said apart from the bridge, HNCDI also proposed the construction of an underground tunnel that crosses the Straits of Malacca. Ibrahim and Lim are major shareholders of SOMP.

Malacca Chief Minister Ali Rustam, who attended the seminar, said the proposed bridge will be the longest man-made link between two countries.

"We know that besides government approvals, there are other issues such as land acquisition to be dealt with but that should not be a problem.

"The bridge is a viable and profitable project, and expected to boost the economies of both countries," he said.

He said Prime Minister Najib Razak is supportive of the project, first mooted by former prime minister Mahathir Mohamad in 1995. It was shelved due to the Asian financial crisis in 1997.

The bridge project was brought up during the Ninth Malay World Islamic Convention in Malacca in January this year.


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