BN Penang Govt's RM1 per square feet land sale? Here are the facts.

Recently, Penang Chief Minister has been under fire for selling land without open tender and also for increasing the yearly operating expenses of the Penang Govt by an astonishing 500% since 2008, which is covered mostly by sale of state land and assets - until there is little left.

In return, the Chief Minister continues to roll out his umpteenth-times repeated cover-line to say that BN sold 36 times more land and got  less money, which is of course untrue.

By now, most people would have seen the following table from Lim Guan Eng multiple times:
 

Much of these land were "sold" decades ago when prices on the mainland was cheap. In fact, it was not even land. Most were land reclamation rights.

I had written about this before here: 'BN sold more land than Pakatan in Penang and collected less' ??

But today, let's focus on item 1 Tanjung Pinang  where 980 acres of land was supposedly "sold" for RM1psf  under the previous BN Penang Govt - netting just RM42.7 million.

This is certainly a serious allegation - "selling" state land for just RM1psf.

But here are the facts:

This is not even a land sale but a 30 years land reclamation concession agreement awarded in1992 by the then BN state govt to a Joint-Venture that is 60% owned by the state agency Koperasi Gabungan Negeri Pulau Pinang  (KGN) and 40% owned by the 100% state-owned Penang Development Corp (PDC).

There is not a single inch of Penang land sold. On top of that, the concession was awarded by the BN Penang Govt to 100% state agencies.

In the interest of not coming up with capital to reclaim the land, the KGN-PDC partnership then formed a joint-venture company called Tanjung Pinang Development Sdn. Bhd. (TPD), with a company called  Permaijana Ribu (M) Sdn. Bhd. (PR).

Permaijana Ribu is owned 72% by UEM, 18% by Mechmar corp and 10% by Yayasan Bumiputera Pulau Pinang 

At this stage, the project has become 70% PR-owned and 30% KGN-PDC owned - with KGN-PDC getting it's 30% shareholding for free while PR has to bear the cost of the shares and  most of the reclamation expenses.

After UEM fell into difficulties due to the Asian Financial Crisis, it sold its stake to a private company called Bridgecrest Resources Sdn Bhd (Bridgecrest).

Therefore the effective ownership of the project is as folows

Note: Over the years, there were various changes in shareholdings as some of the shareholders sold out. As of today, the project is now 78.2% owned by listed Eastern & Oriental Bhd,, which Sime Darby is a major shareholder and 21.2% owned by the Penang Development Corp (PDC).

As you can see, fully 37% of the so-called RM1psf "sale" is owned by state-owned company which has already benefited by getting free shares and capital injections by the private companies who partnered with them.

This also means that when the land is fully-reclaimed, these state agencies will own an effective stake in 37% of the reclaimed land.

Wait... there's more!

Under the terms of the agreement. other than the 37% owned by the state agencies, a certain percentage of the land reclaimed has to be surrendered back to the Penang State Govt directly.

Under phase 1 of the reclamation (called STP1), which ended in the year 2006, a total of 240 acres of land was reclaimed.

And out of this 240 acres of land, 47 acres of land was handed back to the state govt free of charge.

Under phase 2 (called STP2), the remainder 760 acres of land will be reclaimed - out of which 191 acres will be handed back to the Penang Govt free of charge.

In fact, the STP2 was approved by the current DAP Penang Govt in 2011 and generously gave a 3 years extension to the concession too.

The Penang Govt has used 110 acres out of these 237 acres to pay for the RM6.34 billion Penang Tunnel project. - which values the entire land handed back FOC to the Penang Govt to be at least RM14 billion.

To summarize, not only is this not a RM1 psf land sale by the previous BN Penang Govt, but the Penang people benefits from the following:

1) State agencies own 37% of the reclaimed land for both phases of Gross development value (GDV) of RM21 billion
2) Penang Govt got roughly RM14 billion of land handed back FOC to them.

So, YAB Lim Guan Eng: How can you call this RM1 per square feet sale of land?

How can you claim the total sales proceed of 980 acres of land is only RM42.7 million?

How can you even claim this is sale of land?

Because of your repeated lies, many Penang people have the wrong perception that the previous BN Penang govt had sold land at RM1 per square feet to a private company.

What a liar that you are.

A lie that you have repeated umpteenth times over the last few years to justify your incredible sale of tens of billions of state land and assets.