Why Tunnel SPV condo project approved in 8 days but state affordable housing takes 223 days?

Eric See-To

Deputy Director,
Barisan Nasional Strategic Communications.

1. 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.

2. The first payment was a plot of seaside state land valued at RM135mil and was transferred to the SPV on 17th February 2015.

3. 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.

4. 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 dayseven though it’s standard approval period (Piagam) is 108 days.

5. 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.


6. 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.

7. The condo project is now facing some delays as more than a 100 residents in the area had complained that the MBPP is wrong in approving such a high density project in that residential area.

The residents had managed to get a stay order from the Penang State Appeals Board who had ruled in their favour.

8. However, in a shock move the MBPP then appealed on behalf of the developers against their own Penang State Appeals board. The MBPP lost the appeal in April 2016 and had to pay coststo the appeals board and the residents.

It was an embarrassing situation where the state government via the MBPP had appealed on behalf of a developer against the state government’s own appeal board and lost. Hence the state government had to pay the state government for costs.

9. Further checks show that even the Penang State Government’s one and only affordable housing project on the island at SP Chelliah took 223 days to get approval from MBPPcompared to 8 days for the Tunnel SPV’s luxury condo development.

10. Other checks show that a Federal Government agencyaffordable housing project took 516 daysto obtain planning permission approval from the planning division of MBPP- as opposed to 8 days for the luxury condo project of the Tunnel SPV company and 223 days for the Penang Govt’s own affordable housing project.

11. Questions are now raised if the Penang Tunnel SPV company had been given special treatment in the super-fast approval of the luxury condo project – especially when compared to affordable housing projects.

12. Did the Penang Government increase the value of the land to the Tunnel SPV company by increasing the development density by almost 5-fold?

The higher the density approved, the more valuable is the land.

13. Is it the normal practice of the Penang State Government to appeal on behalf of a developer against its own State Appeals Board or was this a one-off event – hence indicating special treatment.

Source: BNSC.my



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