Lim Guan Eng was accused of selling Penang land to earn revenue in order to maintain a surplus in the state financial statement. In Lim’s defence, he said that Penang state government under Barisan Nasional rule sold more land than Pakatan Harapan state government. Plus, BN earned less than PH from the land sales.
Actually, the list was incomplete and Lim didn’t account in the inflation rate. Penang BN chairman Teng Chang Yeow revealed more lands that were sold under Lim governance.
Selling lands to private developers lead to the rapid development in the state, but it comes with a high price. Private developers will build high end properties instead of low medium cost properties. It is because they can earn more revenue by maximising the usage of their lands. Hence, the property price will increase in Penang.
Let’s take a look on the issue of Bayan Mutiara land deal. In 2010, the Penang Development Corporation (PDC) initiated an open tender for 102.6 acres land in Bayan Mutiara. A year later in 2011, it was revealed that Ivory Properties had won the land deal with the purchase price of RM1.072 billion.
In 2012, former UMNO Penang Division Chairman Datuk Zainal Abidin Osman and former Kota Belud MP Abdul Rahman Dahlan questioned Lim over the land deal. Zainal Abidin framed Lim that he sold the land for twice the amount of the market price. According to UMNO Penang, Land in Bayan Mutiara was valued at RM84psf for 18-acre plot and RM65psf for 88-acre plot.
Lim defended that he set the 102.6-acre plot at RM200psf because he wanted to earn more revenue for the state government and he succeeded.
Lim further defended himself that Bayan Mutiara land deal was conducted through an open tender. Ivory won the deal because they have the highest bid at RM240 per square feet, with the payment to be made within 8 years.
Later, PDC requested Ivory to shorten their payment time frame to 5 years, but the price of RM240psf remained intact. Ivory agreed.
When we look at the bidders for land, there were Ivory Properties, SP Setia and Chia Tai Xing Ye. SP Setia was the close competitor for Ivory but failed to seal the deal. GLCs (PNB, KWAP, EPF, LTH and LTAT) have 82.56% of shares in SP Setia. There is a possibility that UMNO politicians were upset because the land deal was given to Ivory instead of SP Setia.
If this practice were to continue, there will be a land scarcity for the state government to sell in the future. Plus, the property price will increase because private developers will not build affordable housing as it will only reduce their sales revenue. Now, Chow Kon Yeow had been appointed as the new Penang Chief Minister. Will he continue the same practice of land selling?