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MutiaraGate : How Penang Lost Rm50 Billion To Piratization !

The scandalous manner the Penang state government had sold 103 acres of super-prime land at Bayan Mutiara to a private developer has enraged the public opinion in Penang and led to numerous NGOs and politicians demanding for full and detailed explanation on the deal.

However, instead of taking the democratic and responsible course of action and put his over-hyped CAT principles in practice, CM Lim Guan Eng has shockingly opted go on offensive and attempt to attack and silence the critics. Many Penangites are appalled at Guan Eng’s display of unbridled rage, utter contempt and arrogance to the calls for accountability and transparency. Such high-handed behavior and “the CM knows best” mindset reflects very poorly upon his leadership style and his administration.

Instead of providing full details, the CM has once again resorted to spin-doctoring by dispending and flooding the media with even more half-truths and lies to confuse and mislead the public. Despite Guan Eng’s denials, many questions still remain open. In fact more disturbing details have emerged since my last letter on this matter.

Issue # 1: Why did PDC sell the Bayan Mutiara land to a private developer?Penang’s most precious asset is its land bank and the lack of it is often cited as the main reason for sky-high prices of houses in the state. By transferring public assets at ridiculously low price to private interests, Guan Eng is prioritizing short term gains for himself and his party over the long term interests of the state and the future generations.

Issue # 2:  Why develop Bayan Mutiara land for high-end property development when the most urgent need of Penangites today is affordable housing? Why not allow PDC to build affordable houses for the poor and middle-class Penangites at the same location instead of allowing private developer to build million-ringgit super condos and offices for the ultra-rich foreigners?

Issue # 3: The excuse by Guan Eng that the state needed the money to finance its Rm500 million “Affordable Housing Fund” is utterly illogical. Firstly the state is sitting upon a huge cash pile (thanks to the previous administration) so there is absolutely no need to resort to selling public assets to raise money.  Secondly the land at Bandar Cassia for state’s Affordable Housing Project belongs to PDC. As such state only needs to finance the construction cost of the houses. Even if the state doesn’t want to dip into its own coffers, as an accountant Guan Eng surely should know that the financial institutions would be more than happy to provide bridging loans as in the case of private sector housing projects. Such poor decision only highlights Guan Eng’s ability as poor accountant and an incompetent leader.

Issue # 4: Guan Eng claims that the project was awarded via an open tender process. This is indeed a blatant lie since it is clearly indicated in Guan Eng’s own statements that it was an RFP (Request For Proposal). There is indeed a big difference between the two and Guan Eng is trying to mislead Malaysians into believing that an Open Tender is the same as RFP. Ivory’s own statements’ toBursaalso mentioned that the final price was arrived after negotiating with the state government.

Issue # 5: The Penang CM claimed that the cut-rate price of Rm240 psf as above market rate and he even quoted the real price to be below Rm150 psf. However, there have been previous cases where land had exchanged hands at prices up to Rm474 psf. If a private seller is able to fetch almost double the price of Bayan Mutiara sale via direct negotiation, then it can be only surmised that Guan Eng’s administration is totally inept. Surely Ivory is not stupid to pay Rm240 psf if the real market value is only Rm150 psf. In fact, Ivory can just hang on the land for a few years and then sell it at huge profit due to rapid appreciation of land prices.

Issue # 6: The RFP for the project was poorly thought-out and lacked in professionalism. Fore example the RFP required the bidders to have a minimum of Rm50 million in paid-up capital even though the land itself was worth at least Rm 1 billion. It is illogical to expect a company with such limited capital able to undertake a huge mega project. That Ivory had entered into a joint venture with Dijaya Corporation to develop the land clearly highlights this point.

It was also reported that the original RFP was recalled and the bidders were requested to re-submit their bids for 2nd time. Such lack of professionalism is symptomatic of the poor management skills of this administration.

Issue # 7:  In response to criticisms, Guan Eng claimed that Ivory is required to build affordable house, schools and places of worship under the terms of agreement. Can Guan Eng disclose the detailed of the agreement and design to show these claims are real and not another lie to protect him and his administration?  Ivory’s numerous statements to press andBursamakes no reference to such requirements.

Issue # 8: Under the terms of contract, the developer is required to pay the state the first installment of Rm 109 million upon the execution of purchase agreement. However, without informing the public, the state has stealthy agreed to postpone the first installment not once but twice. In fact it was revealed that up to now, PDC has only received a paltry Rm 20 million from the developer. Can Guan Eng explain why PDC allowed Ivory to pay in 7 installments over 5 years when the usual industry practice is either cash at the execution of the agreement or over a period of a few months? This effectively means PDC is functioning as the banker for Ivory. Can the CM also explain why state had been over-generous in agreeing for postponements of payments?

Issue #9: Can the state government explain why the land belonging to PDC has the mysterious “Chief Minister, Inc. (CMI) as registered title holder? What is the role of CMI in land sale and why is it necessary to have a third-party (CMI) to get involve in this deal? Was there a commission paid to CMI for “facilitating” the deal?

In the 16th century, pirates roaming high seas carried “letters of marquee” issued by governments which allowed them to piratize foreign ships of their valuable cargoes. In Penang today, it appears that private companies are being allowed to rob, plunder and stripPenang of its most prized assets using modern day equivalent of ‘letters of marquee” called “RFP and Open Tender” issued by the DAP-led state government.

About calvinsankaran

A politically, economically, environmentally and socially conscious professional and Penangite who loves to expose lies and hypocrisies.


6 thoughts on “MutiaraGate : How Penang Lost Rm50 Billion To Piratization !

  1. Hope you can blog frequently from now on since most of the media ignore you due to high hand tactic of DAP.

    Posted by cruel | March 28, 2012, 3:32 pm
  2. 50 billion is lot of money!

    But wait… is it RM50 million in your article or 50 billion as said in your title?

    Never mind, lets make it RM500 billion. I will call Barisan Nasional 1Media Centre to lend you another zero, since they have lots of zeros hanging around.

    Or maybe RM5000 billion?

    Posted by trollface | April 3, 2012, 10:23 am
  3. Crikey, only two posst???? I was expecting more from you. I am especially a big fan of your views on Hindraf. Come on…more….more….

    Posted by 7777ismyname | April 4, 2012, 1:56 am
  4. After I initially left a comment I appear to have
    clicked the -Notify me when new comments are added- checkbox
    and now each time a comment is added I receive 4 emails with the exact same comment.
    Perhaps there is a way you are able to remove
    me from that service? Thanks a lot!

    Posted by HighRakeback | July 7, 2012, 3:30 am
  5. Admiring the dedication you put into your site and detailed information you provide.
    It’s great to come across a blog every once in a while that isn’t the same outdated rehashed
    material. Excellent read! I’ve saved your site and I’m adding your RSS feeds to my Google account.

    Posted by Lawerence | September 28, 2012, 6:24 pm
  6. Penangites probably a bit too busy with their daily chores that they could hardly find any spare times just to check on whether the CAT is really doing what it’s suppose to do to the mice. If present lackadaisical attitude doesn’t change, it is no surprise if the mice will romp happily around the island like nobody’s business.

    Posted by Perakian | January 21, 2013, 12:22 am

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