PENANG, Malaysia (AFP) -- Malaysian Prime Minister Abdullah Ahmad Badawi on Sunday launched the construction of a second bridge linking the northern island of Penang with peninsular Malaysia.

The three-billion-ringgit (826-million-dollar) bridge is part of a national development plan to boost the country's economy in the northern region, Abdullah, who is also finance minister, said at the launch of the project.

"Penang will be a hub for the northern development corridor for transportation, especially port and airport, after the completion of the second bridge," he added.

"The bridge will provide the catalyst for the development of the northern corridor. Such a facility is needed to provide the impetus for the development," he said.

Penang is considered Southeast Asia's "Silicon Valley" as it houses hundreds of IT-related companies including Dell, Intel and Motorola.

Construction of the planned 24-kilometer (15-mile) bridge linking the town of Batu Maung on the island and Batu Kawan on the mainland is expected to be completed by January 2011.

The start of construction comes a week after Abdullah launched a five-billion-dollar project aimed at transforming the idyllic southern Johor state into a metropolis similar to Hong Kong or Shenzhen, in China.

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

"Government agencies and UEM will work together to complete the bridge," the premier said.

Abdullah said the second link would also boost trade.

"A lot of goods will be transported through the first and second bridges. This means activities at the Penang International Airport and the Penang Port will increase many-fold in terms of import and export business," he said.

Abdullah said the second link would reduce traffic congestion significantly on the existing Penang Bridge.

The two-lane bridge with a separate motorcycle lane covers a span of 250 metres across, and 17 kilometers of the stretch will be overwater. UEM Chairman Hassan Kendut said the bridge would open up "areas that will benefit from spill-over socio-economic development opportunities."

"Local engineers and blue-collar workers will spearhead the construction of the bridge as we want to provide ample opportunities to our local workforce," Abu Hassan said in a statement.

The launch of the project comes ahead of a key UMNO meeting where delegates are expected to push Abdullah for measures to fuel greater economic growth.

Malaysia's economy expanded by 5.5 percent in the first quarter of 2006 and 5.9 percent in the second quarter. It grew by 5.2 percent in 2005.

In September, the government scaled back its 2006 economic growth forecast to 5.8 percent from 6.0 percent, citing challenges including high oil prices and competition from China and India.