BN: A joint venture could have left Jerejak stake intact

Muhammad-Farid-Saad-1

GEORGE TOWN: A joint venture with a private developer could have left the Penang government’s stake in Jerejak Island resort intact, a BN lawmaker told the state assembly today.

Muhammad Farid Saad (BN-Pulau Betong) said Penang could have suggested a joint venture option to the majority stakeholders in Tropical Island Resort Sdn Bhd (TIR).

He said that way, the private developer could be included in the development while holding on to government shares.

“The Penang government need not have sold its shares to Ideal Properties.

“Penang Development Corporation (PDC) could have chosen to be directly involved in the redevelopment project and share in the profits in the redevelopment, estimated at RM1.5 billion,” Farid said during the debate on the 2017 Supply Bill today.

State government-owned entity PDC recently sold its 49% share in TIR to an Ideal Properties subsidiary, causing many in BN to condemn the sale as a loss to Penang.

PDC made a RM140 million profit from the sale.

Penang, on the other hand, said it was majority shareholder Urban Development Authority (UDA) that had offered to sell PDC’s shares to Ideal Properties. The state government claimed it had no say as it was a minority shareholder.

TIR owns 32 hectares on Jerejak Island. Federal-linked UDA owns 51% of the company and the remainder shares were held by PDC. The shares were sold to UDA in 1997 by the previous BN government.

Farid went on to question the land encumbrance on the 32 hectares, which is on a leasehold of 60 years until 2062.

“In order to allow redevelopment, I am sure the land cannot be leasehold any more. I have learnt that the land status has been transferred to freehold already.

“I am sure of this as payment for the sale of shares has been made. It is impossible that after the high price tag for the shares, the land will still be leasehold.

“If this is indeed true, how much in premium has been charged to TIR? Where is the money paid?”

Farid also criticised the special treatment given to parties involved in the share sale. He said this is so through the special “instalment” plan given to the developer who had bought PDC’s shares.

“PDC announced that a 10% downpayment of RM15.6 million has been paid and that full amount will be made in due time by 2024. Strange that it is allowed to pay little by little.

“Must I remind everyone that PDC is not individually owned or family owned, but is a state entity. I object to this method of payment.

“A developer was also given an instalment deal for the Bayan Mutiara land sale, for which payment is still being made. We must stop this kind of practices.”

He said to avoid being played out by the Penang government, UDA would be better advised to sell the RM146.28 million worth of shares to a developer of the state government’s choice.