THE THIRD FORCE
Note: Below are excerpts from an editorial by The Malay Mail Online (in black), with coloured sections being responses by The Third Force to claims made by the Chief Minister of Penang, Lim Guan Eng.
MMO: Penang did not pay a single sen for the feasibility studies of the RM6.3 billion undersea tunnel, Penang Chief Minister Lim Guan Eng said today.
TTF: On the 24th of June 2017, Chow Kon Yeow, who chairs the Penang state Local Government Committee, claimed that the fee involved was only RM177.5mil, inclusive of payments for the Detailed Environmental Impact Assessment (DEIA).
However, a month earlier (on the 22nd of May 2017), Lee Hock Seng told a state legislative assembly sitting that a total of RM220mil had been paid exclusive of the DEIA, meaning, the state government issued payments in excess of what Chow claimed, none of which related to the DEIA.
Today, the Chief Minister is insisting again that the state did not pay a single sen for feasibility studies. If he’s so adamant, will he also go on record to declare that Chow Son Yeow lied to the people of Malaysia, or, at the very least, admit that his EXCOs were ill informed?
MMO: The lawmaker insists that his state had only paid by swapping land for the three highways.
“We only swapped two pieces of land with the development value of RM1,300 psf for 3.7 acres of land which comes up to RM208 million,” he said in a press conference at his office today.
He stressed that the land swap worth RM208 million was for work done on the three highways and not the undersea tunnel.
“Contractually the project contractor should be starting on the three highways first, that comes first,” Lim said.
TTF: On the 21st of July 2017, Dato’ Eric See-To pointed out the following:
- The RM209mil payment to the Penang Tunnel Special Purpose Vehicle (SPV) company for the consultancy studies for the 3 roads consist of two plots of state land.
- The first payment was a plot of seaside state land valued at RM135mil and was transferred to the SPV on 17th February 2015.
- The SPV then went into a joint-venture with a listed company to develop this land on a 60-40 basis with the SPV holding a 40% interest. The Joint venture (JV) is for the development of a luxury condominium project comprising of two blocks of 40 storey buildings totaling 572 condo units where each unit is priced at RM1,200psf and above.
The gross development value of this condo project has been reported to be RM800 million.
- The JV then applied to the Majlis Bandaraya Pulau Pinang (MBPP) for planning permission on 9th March 2015. The planning division of MBPP then gave its approval within 8 days even though it’s standard approval period (Piagam) is 108 days.
- It was calculated that the approval given had also raised the development density to 156 units per acre from the 30 units per acre limit that had previously been in effect in that area several years ago.
- Checks at the luxury condo project site showed that construction has already started – despite none of the 3 highways having started construction – a delay of at least 3 1/2 years.
Will Guan Eng at least have the decency to either respond to Eric (particularly on point 6) or declare the Barisan Nasional Strategic Communications Deputy Director to be a liar?
MMO: He explained this is why there was no hurry for the feasibility studies for the undersea tunnel to be completed first.
TTF: Really?? Then why was there a hurry to grant the SPV JV approval for the development of the aforementioned land despite the 3 1/2 year delay for the construction of the highways??? Can the Chief Minister explain this?
MMO: “The undersea tunnel is only expected to be completed in 2027, still a long way to go, so let’s concentrate on the three highways first,” he said.
TTF: So why the delay to build the highways???
MMO: Lim was responding to criticisms by his political opponents over the delay in the completion of the feasibility studies.
He stressed that the state did not pre-sell any other lands or swap any other lands other than the first 3.7 acres for the whole RM6.3 billion project.
The two pieces of land covering 3.7 acres were swapped to pay for the completed environmental impact assessment (EIA) reports for the three highways which was already submitted to the Department of Environment.
“We will pay for the whole project through more land swaps in future but we’ve not done that yet because project is not completed,” he said.
Lim added that The Star article claiming the state had “pre-sell state land rights” worth RM3 billion was a blatant lie.
“I don’t know how they get that figure, it is an outright lie,” he said.
TTF: Yesterday, Dato Eric See-To pointed out the following:
The land in question is a 50 acre piece of land of Gurney Drive that is supposed to be given as payment to the Penang Tunnel Special Purpose Vehicle (SPV) once they have completed building the 3 roads portion of the project.
This land is currently being reclaimed by another private company but contractually, they have to surrender this land to the State Government.
It is thus a land rights. Rights under law as well as accounting is considered an asset and has value – it is as good as real land when the reclamation is complete.
As of today in Jan 2018, the SPV has not even started construction of any of the roads, hence by right the land or land rights does not belong to them yet. They can only claim full ownership of the 50 acres one they have satisfactorily completed all 3 roads.
However, in partnership with a listed company, the SPV announced a RM15 billion GDV project on this land on 13 August 2015 with the Penang Chief Minister as a witness.
And on 16th January 2016, the SPV company signed to sell the full 50 acres to a subsidiary of the listed company for a total of RM2.83 billion (okay, not exactly RM3 billion as reported by The Star). The Penang CM was also a witness at this signing too.
http://www.theborneopost.com/…/ewein-subsidiary-acquires-l…/and here: https://www.edgeprop.my/…/eweins-unit-buys-50-acres-land-pe…
This 50 acres land transaction was also announced to Bursa Malaysia by the listed company: http://www.bursamalaysia.com/…/company-announcements/4976409
The presence of the Chief Minister in both the project announcement and the signing of the sale of land may be construed as tacit endorsement, if not approval.
Around this prized 50 acres of prime sea-side land, the Penang Govt had also announced RM8 billion worth of projects to be funded at their own cost including the Gurney Wharf project, an 8 line road which they said will cost RM400mil and a 19.5km Pan-Island Link highway to connect to the airport at a cost of RM7.5 billion (or a massive RM385mil per km).
All of these infrastructure announced and to be paid for by the Penang State Govt is expected to significantly add value to the 50 acres land which is 100% private owned while the state govt has no stake in there at all.
Will Guan Eng please respond to the BNSC deputy director?