Never mind whether it is a black cat or a white cat, just so long as it catches the mouse, so said Deng Xiao Peng when he led the biggest Socialist state in the world down the road of transformation to become the greatest Capitalist state in the world in a mere two decades which took others two centuries.
And did not Russia too go this route? It always starts as a fight for the oppressed. And the oppressed rises up and throws out the oppressor. Then the oppressed discovers that it is easy to talk when you are not in power but not that easy when you now hold the reins of power.
That was the déjà vu feeling I experienced when I read this article in The Sun where Barisan Nasional (BN) claimed the Penang Island Municipal Council (MPPP) has signed away an estimated RM488 million in exchange for the RM250 million Subterranean Penang International Convention and Exhibition Centre (SPICE) project.
Many Penangites may not be aware that the Concession Agreement for Build-Operate-Transfer (BOT) of sPICE, PISA indoor stadium and PISA Aquatic Centre was dated and signed on 19 Aug 2011 and sealed/stamped on 24th August 2011. Last week, the agreement was open for public viewing and information derived there and from The Sun have a few areas of concern. Apparently, few knew about the public viewing which required prior appointment and limited to only two hours - no cameras allowed. Why?
Article 2 of the agreement seems to indicate that the grant of concession rights and sale of hotel site that MPPP has to comply with appear to be lopsided in favour of the developer.
The CM and MPPP should explain why all assessment rated for the entire project site (sPICE, PISA, indoor stadium, Aquatic Centre, car park but not the hotel and retail outlets) shall be borne by MPPP during the concession period.
In the agreement, it is agreed that the Concessionaire shall have the right to apply and/or appeal to MPPP for waiver, exemption and/or reduction of quit rent AND assessment rates for the retail outlets.
Why allow this? Business entities should not be given such waivers as it would mean loss of state revenue and increase in profits to the Concessionaire!
The agreement gives the allowance for the developer to build an additional 1,500 residential units in any project, in any part of Penang, within the concession period of 30 years as one of the loss making decisions.
According to Datuk Teng Hock Nan at a recent press conference, such a move would cost MPPP an estimated RM450 million, as the the council could not impose development charges on the units, or control the built-up areas, and selling prices for the additional units. He said the RM450 million estimation was calculated based on land cost – 30% of RM1 million per unit.
A 1.25 hectare site, within the SPICE project site, where a five-star hotel is to be built, was undervalued and sold by the Penang state government at RM100psf (at a total RM13 million). Estimated value is between 200RM-300RM per square foot! This means that the MPPP could have incurred a loss of RM27million if the land was sold at market rates (calculations based on 300RM psf).
MPPP would also have to provide mature land to the developer to build 450 low-medium cost units as per the agreement. Mature land possess infrastructure like roads and utilities and who would provide the infrastructure and at whose expense?
The CM should explain the rationale behind the decision as to why MPPP unconditionally and irrevocably agrees to grant the Concessionaire and/or any of its Related Corporations the right to additional density of any development carried out by the Concessionaire within the island of Pulau Pinang over and above the maximum permissible density of the land, provided always that the total sum utilized and spread over all projects within the island does not exceed 1500 residential units. They must also explain why there shall be no development charges or built up area control or selling price control imposed by MPPP on any such additional density utilized.
According to the agreement, the Concessionaire shall be required to construct no more than 450 units LMC and each LMC unit will not exceed a built up area of 650 sq. ft. and will be sold at a price that commensurates with the prevailing price of LMC under the Housing development Guidelines at the point of construction but not lower than RM72,500 each provided the State shall provide a piece of land at no cost to the Concessionaire for the construction of the same within 20 years of execution of the Agreement.
Is there a mistake somewhere? Why give them the option of construction within 20 years? Wouldn't the price of houses be higher by then? They should clarify that price cap. In practice, developers add hidden costs such as the sale of car parks, renovation packages etc and in the end - consumers pay a higher price. The selling price of the LMC units should follow the state approved selling price rather than simply stating a minimum price and letting the developer take the lead especially since it is LOW MEDIUM COST housing!
Whilst development is good for Penang, it has to be PLANNED development that does not impact the lifestyle of Penangites. There has to be proper adjustments and planning in anticipation for the increase traffic flow. It should be a win-win situation for all. As far as possible, it should be equitable. We don't want investors to suffer losses, neither do we want Penagites to lose out. However, a letter of intent which was sent to the Concessionaire on 28th December 2010 states this:
The Traffic Impact Assessment (TIA) di perlukan dan Social Impact Assessment boleh di kecualikan.
Why?
It seems that LGE is intent on the route of development to transform Penang into the likes of Singapore.
Last Friday, Anita Gabriel of The Star reported that "Several foreign giants apart from China's Beijing Urban Construction Group (BUCG), namely Citic Group of China, South Korea's SK Group, as well as couple of Japanese conglomerates and one Singapore company have expressed interest to bid for some RM8bil worth of infrastructure jobs in Penang."
The report also said that in April, Prime Minister Datuk Seri Najib Abdul Razak and Chinese Premier Wen Jiabao witnessed the signing of a memorandum of understanding between the Penang government and BUCG for a proposed traffic-alleviation project. Even so, Lim said the RFP was open to other interested parties apart from BUCG.
The projects include the 6.5km tunnel job (from Gurney Drive to Butterworth) which takes up the bulk of the RM8bil cost, the 4.2km Gurney Drive-Lebuhraya Tun Dr Lim Chong Eu bypass, and 4.6km Lebuhraya Tun Dr Lim Chong Eu-Bandar Baru Air Itam bypass. The proposed tunnel project will be the third link between Penang and Butterworth.
“We need to find a way to disperse traffic and with these projects, we will complete the loop. We've revived the idea of a third link and want to get it done,” he said.
LGE said they will finance these projects by land swap as they are expensive. The land will be nearby reclaimed land, which means they will own a certain acreage. As seen by the Jelutong Expressway, any land reclamation undertaken by the developer has provided them millions and millions in terms of profit from the sale of many projects developed on reclaimed land.
More land reclamation for infrastructure but the roads remain clogged and jammed with vehicles.
At the end of the day, there could be development, but at whose expense? Who bears theexternalities of such lopsided decisions, especially that of the sPICE project and the tunnel project?
Who approved the RM8 billion for the infrastructure jobs? Have all these mega projects been brought up to ADUNs and disclosed to the public? Has the government engaged the rakyat in all their deliberations?
Does Penang really need such projects? What does Penang really need?
Penang needs a proper traffic alleviation system such as Mass Rapid Transportation (MRT), a subway system, good public transport system so that our roads are not clogged up with cars and all kinds of vehicles that will not affect our quality of life or cause pollution.
Granted that there are many accolades that the state government has received in the last three years of their governance but where these issues are concerned, the CM owes it to Penangites to explain the rationale behind all these moves.
And did not Russia too go this route? It always starts as a fight for the oppressed. And the oppressed rises up and throws out the oppressor. Then the oppressed discovers that it is easy to talk when you are not in power but not that easy when you now hold the reins of power.
That was the déjà vu feeling I experienced when I read this article in The Sun where Barisan Nasional (BN) claimed the Penang Island Municipal Council (MPPP) has signed away an estimated RM488 million in exchange for the RM250 million Subterranean Penang International Convention and Exhibition Centre (SPICE) project.
Many Penangites may not be aware that the Concession Agreement for Build-Operate-Transfer (BOT) of sPICE, PISA indoor stadium and PISA Aquatic Centre was dated and signed on 19 Aug 2011 and sealed/stamped on 24th August 2011. Last week, the agreement was open for public viewing and information derived there and from The Sun have a few areas of concern. Apparently, few knew about the public viewing which required prior appointment and limited to only two hours - no cameras allowed. Why?
Article 2 of the agreement seems to indicate that the grant of concession rights and sale of hotel site that MPPP has to comply with appear to be lopsided in favour of the developer.
The CM and MPPP should explain why all assessment rated for the entire project site (sPICE, PISA, indoor stadium, Aquatic Centre, car park but not the hotel and retail outlets) shall be borne by MPPP during the concession period.
In the agreement, it is agreed that the Concessionaire shall have the right to apply and/or appeal to MPPP for waiver, exemption and/or reduction of quit rent AND assessment rates for the retail outlets.
Why allow this? Business entities should not be given such waivers as it would mean loss of state revenue and increase in profits to the Concessionaire!
The agreement gives the allowance for the developer to build an additional 1,500 residential units in any project, in any part of Penang, within the concession period of 30 years as one of the loss making decisions.
According to Datuk Teng Hock Nan at a recent press conference, such a move would cost MPPP an estimated RM450 million, as the the council could not impose development charges on the units, or control the built-up areas, and selling prices for the additional units. He said the RM450 million estimation was calculated based on land cost – 30% of RM1 million per unit.
A 1.25 hectare site, within the SPICE project site, where a five-star hotel is to be built, was undervalued and sold by the Penang state government at RM100psf (at a total RM13 million). Estimated value is between 200RM-300RM per square foot! This means that the MPPP could have incurred a loss of RM27million if the land was sold at market rates (calculations based on 300RM psf).
MPPP would also have to provide mature land to the developer to build 450 low-medium cost units as per the agreement. Mature land possess infrastructure like roads and utilities and who would provide the infrastructure and at whose expense?
The CM should explain the rationale behind the decision as to why MPPP unconditionally and irrevocably agrees to grant the Concessionaire and/or any of its Related Corporations the right to additional density of any development carried out by the Concessionaire within the island of Pulau Pinang over and above the maximum permissible density of the land, provided always that the total sum utilized and spread over all projects within the island does not exceed 1500 residential units. They must also explain why there shall be no development charges or built up area control or selling price control imposed by MPPP on any such additional density utilized.
According to the agreement, the Concessionaire shall be required to construct no more than 450 units LMC and each LMC unit will not exceed a built up area of 650 sq. ft. and will be sold at a price that commensurates with the prevailing price of LMC under the Housing development Guidelines at the point of construction but not lower than RM72,500 each provided the State shall provide a piece of land at no cost to the Concessionaire for the construction of the same within 20 years of execution of the Agreement.
Is there a mistake somewhere? Why give them the option of construction within 20 years? Wouldn't the price of houses be higher by then? They should clarify that price cap. In practice, developers add hidden costs such as the sale of car parks, renovation packages etc and in the end - consumers pay a higher price. The selling price of the LMC units should follow the state approved selling price rather than simply stating a minimum price and letting the developer take the lead especially since it is LOW MEDIUM COST housing!
Whilst development is good for Penang, it has to be PLANNED development that does not impact the lifestyle of Penangites. There has to be proper adjustments and planning in anticipation for the increase traffic flow. It should be a win-win situation for all. As far as possible, it should be equitable. We don't want investors to suffer losses, neither do we want Penagites to lose out. However, a letter of intent which was sent to the Concessionaire on 28th December 2010 states this:
The Traffic Impact Assessment (TIA) di perlukan dan Social Impact Assessment boleh di kecualikan.
Why?
It seems that LGE is intent on the route of development to transform Penang into the likes of Singapore.
Last Friday, Anita Gabriel of The Star reported that "Several foreign giants apart from China's Beijing Urban Construction Group (BUCG), namely Citic Group of China, South Korea's SK Group, as well as couple of Japanese conglomerates and one Singapore company have expressed interest to bid for some RM8bil worth of infrastructure jobs in Penang."
The report also said that in April, Prime Minister Datuk Seri Najib Abdul Razak and Chinese Premier Wen Jiabao witnessed the signing of a memorandum of understanding between the Penang government and BUCG for a proposed traffic-alleviation project. Even so, Lim said the RFP was open to other interested parties apart from BUCG.
The projects include the 6.5km tunnel job (from Gurney Drive to Butterworth) which takes up the bulk of the RM8bil cost, the 4.2km Gurney Drive-Lebuhraya Tun Dr Lim Chong Eu bypass, and 4.6km Lebuhraya Tun Dr Lim Chong Eu-Bandar Baru Air Itam bypass. The proposed tunnel project will be the third link between Penang and Butterworth.
“We need to find a way to disperse traffic and with these projects, we will complete the loop. We've revived the idea of a third link and want to get it done,” he said.
LGE said they will finance these projects by land swap as they are expensive. The land will be nearby reclaimed land, which means they will own a certain acreage. As seen by the Jelutong Expressway, any land reclamation undertaken by the developer has provided them millions and millions in terms of profit from the sale of many projects developed on reclaimed land.
More land reclamation for infrastructure but the roads remain clogged and jammed with vehicles.
At the end of the day, there could be development, but at whose expense? Who bears theexternalities of such lopsided decisions, especially that of the sPICE project and the tunnel project?
Who approved the RM8 billion for the infrastructure jobs? Have all these mega projects been brought up to ADUNs and disclosed to the public? Has the government engaged the rakyat in all their deliberations?
Does Penang really need such projects? What does Penang really need?
Penang needs a proper traffic alleviation system such as Mass Rapid Transportation (MRT), a subway system, good public transport system so that our roads are not clogged up with cars and all kinds of vehicles that will not affect our quality of life or cause pollution.
Granted that there are many accolades that the state government has received in the last three years of their governance but where these issues are concerned, the CM owes it to Penangites to explain the rationale behind all these moves.
-masterwordsmith
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