Chief Minister Chow Kon Yeow said the cost of the road, from Bandar Baru Air Itam to the coastal expressway on the east side of the island, would be paid in kind through two parcels of land on the reclaimed portion of the Gurney Drive foreshore.
However, he said the exact parcels of land have yet to be determined as the foreshore, commonly known as Gurney Wharf, is still being reclaimed.
It was earlier reported that 110 acres of the wharf would be given up for this purpose.
The undersea tunnel and three roads project was awarded to Consortium Zenith Construction Sdn Bhd (CZC) in 2013.
Speaking in a press conference at Komtar here today, Chow said the new bypass road, 70% of which will be elevated, would take three years to complete from the starting date of Oct 31.
Work will begin at the Air Itam side near Lebuhraya Thean Teik and end at the Tun Dr Lim Chong Eu Expressway.
“The road will help improve traffic dispersal in areas that are severely affected by jams,” he said after signing the sub-agreement with CZC chairman Azmi Khalid.
Azmi, who held the home affairs and environment portfolios as a federal minister from 1998 to 2008, said the project contractors would be entirely local.
He added that a portion of the project will be reserved for Penang contractors.
China Railway Construction Corporation Ltd will remain the engineering procurement contractor, as earlier agreed.
CZC won the project in 2013 in an open tender by the Penang government, beating 60 other companies.
According to state assembly documents, the feasibility study and detailed design (FSDD) costs for the project are RM305 million. Acquiring land will cost RM546 million and the rest, RM5.49 billion, will be spent on construction.
The FSDD was paid through a land swap involving a 3.7-acre parcel of land at Seri Tanjung Pinang near Straits Quay.
The three roads will run from Air Itam to the Tun Dr Lim Chong Eu Expressway (5.7km); Tanjung Bungah to Teluk Bahang (10.53km); and Jalan Pangkor-Gurney Drive junction to Tun Dr Lim Chong Eu Expressway (4.1km).
The 7.2km undersea tunnel will connect George Town’s Pangkor Road and Bagan Ajam in Butterworth. Work on this is scheduled to begin in 2023.