BNSC questions Penang on RM15bil private project by Tunnel SPV

  • Nation
  • Tuesday, 03 Oct 2017

PETALING JAYA: The Penang government should explain why a private property developer and not state-owned Penang Development Corp (PDC) has a stake in the Wellness City of Dreams project, said Barisan Nasional strategic communications team.

Its deputy director Datuk Eric See-To said the PDC will be left without a stake in the project which would be developed on state-owned land.

"Why is the Penang government seemingly benefiting a 100% privately-owned property developer and not allowing the PDC to have a stake in this RM15bil project," said See-To in a statement on Tuesday.

He added that the Penang government is spending up to RM9bil of state funds in projects that seems to help ensure the success of the Wellness City of Dreams.

He also said he received information from sources that showed that the Penang government had allowed the Penang Tunnel Special Purpose Vehicle (SPV) company to pre-sell 50 acres of state land on Gurney Drive for RM2.83bil to a listed company.

He added that the sale took place at a ceremony witnessed by Penang Chief Minister Lim Guan Eng in which the sale would form part of a project called the Wellness City of Dreams.

"This project, which will be 100% privately owned in a joint venture between the listed company and the Penang Tunnel SPV company, was announced to have a Gross Development Value (GDV) of RM15bil," said See-To.


See-To added that the Penang government previously said that "hundreds of millions of ringgit" of state funds would be used to build the Gurney Wharf project next to the City of Wellness project.

Additionally, he claimed the state government had also said that it would build an eight lane road along Gurney Drive in front of the Gurney Wharf project that will cost between RM300mil and RM400mil.

He said that a 19.5km Pan Island Link Highway would connect the development to the Penang International Airport in a RM7.5bil project.

"The Penang government had said that they will pay for this Gurney Drive project. At RM385mil per km, this highway will be the most expensive in Malaysia," he said.

See-To had also provided links as proof of the various announcements by Penang officials related to the those projects he listed.

See-To said it was clear that the Penang government was spending close to RM9bil of funds derived from state-owned land and sales of assets in a way that would make the Wellness City of Dreams project the main beneficiary.

"On the other hand, the state-owned PDC has seen its profits and cash reserves plummet in recent years, until it needed an emergency RM609mil soft loan from the state government early this year," he said.

See-To also questioned the state government's inability to answer his previous questions on the controversial Penang tunnel project.

Among others, he said he had asked the Penang government why it had allowed the SPV company to pre-sell RM3bil worth of state land rights, adding that he had also asked the state government whether procurement guidelines were broken when awarding the tunnel mega-project.

"Why was the Tunnel SPV condo project approved in eight days? The approval for state affordable housing took 223 days," he asked.

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