Pepper Estate set to be demolished

The residents want the state government to step in and stop the estate demolition and re-development.

GEORGE TOWN: Pepper Estate, among  Penang island’s early post-independence housing estates, is set to be demolished to make way for a possible high-end residential development project undertaken by joint venture between a Singapore and local company.

Like all other housing projects since 2008, the Pepper Estate re-development is expected to be far beyond the reach of the majority Penangites.

The Pakatan Rakyat state government had been tightlipped about the imminent project to be undertaken by lifestyle property developer, Oxley Star Sdn Bhd, a wholly owned subsidiary of Singapore-based Oxley Holdings Limited.

Latest Singapore press reports revealed that Oxley Star had entered into a joint-venture with Beverly Heights Properties Sdn Bhd on June 21, 2013 to develop hilly land that covers Pepper Estate.

The board of directors of Oxley Holdings Limited announced that Oxley Star was granted the absolute, exclusive and irrevocable authority, power and right in, over and to the development of some 30 acres freehold land (119876 square metres) owned by BHP.

The freehold land comes under Grant No. 62839 for Lot 3643 and Grant No. 44471 for Lot 2859 at Mukim 18 in Northeast District, Penang, Malaysia.

Like the banished Indian heritage village Kampung Buah Pala, commonly known as Tamil High Chaparral, the Oxley Star – BHP venture signals displacement of an established local community, comprising some 300 homes of 1,000 people.

The Pepper Estate residents live on Lot 3643 covering 78433 square metres or 19 acres of the land.

Singapore Business Preview disclosed that under the Agreement, Oxley Star shall carry out and complete the development on the Land through phased development, construction and building, inter alia, residential accommodation based on BHP’s proposed plans, which are subject to the approval of the relevant authorities.

Oxley Star will be entitled to all income generated from the project including 70% of the gross total sales of the built-up saleable area.

BHP will be entitled to 30% of the gross total sales of the built-up saleable area, estimated to be between RM500 million and RM900 million.

BHP has already received RM10 million from Oxley Star as part payment for its entitlement with the balance to be paid as follows:

•    Second payment: RM10 million within three months of agreement after removal of lessees.

•    Third payment: RM10 million within six months (extendable) after submission and approval of building plans.

•    Fourth payment: RM20 million upon launch of first phase and after clearing existing occupiers and providing Oxley Star with a minimum of five acres for the first phase.

•    Remainder: Upon issue of certificate of fitness of occupation/final progress claim/closure of account for each phase.

Approval needed

Prominent blogger Anil Netto noted that the agreement however was subjected to BHP obtaining all the necessary approvals from local authorities.

The agreement is still conditional on Oxley Star obtaining approval from relevant authorities for land conversion, if any, to a category of land use suitable for the project.

Oxley Star will also have to carry out a complete search on the land with the relevant authorities to enter, examine and inspect the land, and to carry out all necessary surveys and tests, including soil tests to confirm that Oxley Star can carry out the project.

Relevant authorities will have approval for Oxley Star to deal with the land and/or any interests therein as shall be required in law.

“So there is still a lot the local authorities can do to protect the interests of the residents,” Anil wrote in his blog posting.

Interestingly Oxley Holdings has its own corporate social responsibility programmes centered on helping the underprivileged and elderly poor.

“Sounds like a very caring company; so hopefully, it will extend the same care, concern and compassion to the residents of Pepper Estate, many of whom are similarly disadvantaged. After all, we are talking about billions in gross development value,” wrote Anil.

The main question now is that on whether the project would cater only for high-end house buyers, ie rich and elite, or will also include low-cost housing to cater lower income Penangites, dominated by Malays and Indians?

Dominated by ethnic Chinese, Pepper Estate in Tanjung Bungah is among rare housing areas left in Penang island to have people from all walks of life, rich to poor, living harmoniously.

Based on land office records, Pepper Estate was owned by Lim Eow Thoon Estate before it was sold to BHP on May 23, 2012.

Based events recollected by senior residents, Pepper Estate was opened to locals to build homes on land measuring some 78433sqm for ground rentals since 1960s.

All houses have numbers certificate of occupancy. They are not squatters

The new landowner BHP has stopped collecting ground rentals from the households.

It’s learnt, although the developers would rake in millions in profit through the development, they are only offering RM30,000 to RM35,000 per household as compensation.

Fear has already gripped residents following demolition of four homes early this month without their prior knowledge.

Residents’ petition

A residents’ ad-hoc committee headed by Ann Rozario has written a petition on May 27, 2013 to state executive councillor Jagdeep Singh Deo, who is charge of town and country planning, and housing portfolios.

In the petition, a copy which was issued to the area Kebun Bunga assemblyman Cheah Kah Peng, the residents urged the Pakatan government to step in and stop the estate demolition and re-development.

They want their homes to remain.

In the petition, Ann Rozario wrote: “Many of us built homes with high degree of trust and hope that our continued possession of the land would remain undisturbed. Pepper Estate has been a safety valve for lower income socio economic sector, providing affordable housing with easy access to urban facilities. Residents work had to make ends meet and are grateful have no bank mortgages to grapple with.

This is a community that integrates and supports the disabled, the low income groups as well as extended families with a significant number of senior citizens well into their 70’s and 80’s for whom Pepper Estate has been home for past 40 years.

“What happens when a community of 300 homes, with over 1,000 residents, is dismantled? With a compensation of RM 40,000 or thereabouts, what can residents buy in Penang? The purchase of low cost apartments will require bank loans which many may not succeed in obtaining.”

Ann Rozario asked the state government on where would Penangites of lower and middle would go due to inflated housing prices and lack of affordable homes.

“Why should Pepper Estate demolished when it catered housing needs of lower income people?

“Why there should be so much high-end housing schemes on the island?” she asked when met by FMT recently.

The residents are obviously instilling logical sentimental values to their homes and in process, attempting to compel the pro-capitalist DAP-helmed state government to save it as a historical landmark for the island.

But, based on Kampung Buah Pala bitter experience, Pepper Estate is surely set to go into trash bin of history, paving way for another high-end development preferred by powers in Komtar.