The Penang government said it is scaling down plans to create three islands via sea reclamation on the south of the state to only one island.

Penang Chief Minister Chow Kon Yeow said this is at the urging of Prime Minister Anwar Ibrahim, amid ongoing controversy over the project.

This means the project will be reduced to a single island of 2,300 acres, compared to 4,500 acres across three islands as earlier planned, state mouthpiece Buletin Mutiara reported.

The single island, dubbed 'Silicon Island', will be developed over the course of 20 years, he said.

Chow told reporters in George Town that this meant only 115 fishermen will be directly affected compared to 496 if three islands were built.

RM8.5 billion price tag

Chow said the decision was made after discussion with project delivery partner SRS Consortium and the executive council yesterday.

The reclamation is estimated to cost RM6 billion while infrastructure development will cost another RM2.5 billion.

"With this new development, the state government will propose to build the light rail transit (LRT) depot on Silicon Island to avoid building it in a densely populated area.

"Before this, the Land Public Transport Agency (Apad) as the overseeing body (of the LRT project) gave conditional approval, and we hope with this new development Apad can consider approving the state government's proposal," he said.

Other plans for Silicon Island include commercial and residential development, the Green Tech Park, and other developments that the government believes could drive the state economy and tourism.

This announcement comes after Anwar said Putrajaya will provide additional funding for the Penang island light rail transit (LRT) project.

The Penang government planned to fund the project through real estate development on the reclaimed island.

Anwar's announcement was seen as a compromise between grouses by community groups and the state government's development plans.

His daughter and former Permatang Pauh MP, Nurul Izzah Anwar, was a vocal supporter of the community resistance.

The Department of Environment had recently approved the project, with 71 conditions.

Meanwhile, Sahabat Alam Malaysia president Meena Rahman said even the creation of one island could have negative environmental impact.

Further, she said, there is now no pressing need for the reclamation project since the LRT construction will be funded by Putrajaya.

"(The single island) is still very large and will affect the fishery spawning grounds and the environment.

"Plus, it will involve large volumes of sand for the reclamation from Penang or Perak waters, causing more damage," she said in a statement.

She added that it is incorrect of Chow to claim a smaller number of fishermen will be affected because the project will degrade marine habitat and shrimp migration.

"So it is not only the fishermen in the immediate site but also along the Penang, Kedah and Perak waters," she said.

"So scrap the project. Not scale down!"