GEORGE TOWN - Malaysia's federal government has given the green light for the reclamation of three islands off the southern coast of Penang island, a project that has been panned by environmentalists and civil society groups.

The three islands will together be more than three times the size of Sentosa.

Penang Chief Minister Chow Kon Yeow, in a three-paragraph announcement, announced on Thursday (April 18) that the National Physical Planning Council (NPPC) has okayed the project, The Star online news reported.

He said the council, chaired by Prime Minister Mahathir Mohamad, approved the project with 18 conditions.

"The state will abide by the advice of NPPC and feedback from all relevant technical departments while completing the project," Mr Chow said.

The Chief Minister added that revenue generated from the project would be used to fund economic development in the state and would support the execution of the Penang Transport Master Plan (PTMP).

Under the PTMP, Penang plans to build light rail transit lines and new highways to solve its traffic woes.

But the plan has been attacked by civil society groups because project developers are seen profiting at the expense of environmental degradation as green hills are cut to make way for roads. There are also concerns that the project will add to the financial burden of the Penang government.

The reclamation, dubbed Penang South Reclamation, is a project to reclaim three islands, 930ha on Island A, 445ha on Island B and 323ha on Island C.

As a comparison, Sentosa island is 500ha in size.

The three islands will stretch along the entire southern coast line of Penang island.

The land bank from the project is expected to bring in more than RM70 billion (S$22.9 billion) for the state, with the construction of projects such as condominiums.

The state has appointed SRS Consortium as the project delivery partner.

The consortium is a 60:20:20 joint venture between Kuala Lumpur-listed Gamuda, Loh Phoy Yen Holdings and Ideal Property Development, respectively.