GEORGE TOWN: Chief Minister Chow Kon Yeow today said the Penang Island City Council (MBPP) witnessed a huge financial deficit in 2017 owing to the cost it incurred on the Bukit Kukus road project. It cost the council nearly RM300 million.
A federal audit of MBPP showed it spent so much in 2017 that it recorded a staggering 6,893.6% deficit compared to the year before.
Chow said although building roads was out of the council’s jurisdiction, it had to take up this project in the interest of the public and at the insistence of the state government.
He said despite the high deficit figure, MBPP was financially healthy as it was collecting development charges, with a booming local property market and other contributions to remain afloat.
Chow said the council was spending “what was collected from the developers” to benefit the ratepayers with infrastructure projects.
“Normally city council would not implement such a massive road project. It is also outside the jurisdiction of the MBPP in this case.
“But we had to alleviate congestion in the Air Itam, Paya Terubong, Bukit Jambul and Relau areas.
“This is an out-of-the-ordinary expense. If it did not spend that much, it would have had a surplus,” he said at a press conference in Komtar with Housing and Local Government Minister Zuraida Kamaruddin.
It was reported that MBPP would spend RM275.6 million to construct three segments of the 5km Bukit Kukus paired road, connecting Bandar Baru Air Itam and Relau, which cost an overall RM545 million.
The project began on Jan 15, 2016, and was supposed to be completed on Jan 14, 2019.
A major landslide, which saw nine killed and four injured, halted the project. It is now expected to be completed some time in 2020.
Most of the road is being built by the council. A 1.4km stretch will be built by PLB Land Sdn Bhd and another 800m stretch by Geo Valley Sdn Bhd.
According to the second series of the Auditor-General’s Report 2017, MBPP’s deficit rose to RM98.61 million, or 6,893.6%, compared with just RM1.41 million in 2016.
The increased deficit, according to the auditors, was due to repairs done to public utilities and an increase in capital assets (RM29.49 million); vehicle maintenance; and purchase of office equipment, electronics and “professional and hospitality” payments amounting to RM11.69 million.
Another RM24.53 million was allocated for the “depreciation and amortisation of assets”.FMT
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