Saga (Riddle) of the RM1bn compensation: Lay out the facts

According to a recent headline news item, the Penang chief minister claims that if the motion is carried through, the state government may have to pay compensation of RM1bn and could be bankrupted.

Of course, no one in their right mind would wish for this. But to convince the public instead of throwing a bewildering plethora of numbers randomly, the state should systematically present the data and facts to the public so they can draw their own conclusions.

The BN’s 3,241 acres

The Seri Tanjung Pinang project makes up a large chunk of the 3,241 acres of land reclamation rights awarded by the Barisan Penang state government.

The STP concession was originally given in 1992. There are two phases to STP:

  1. Phase I consisting of 240 acres was completed in 2006.
  2. In April 2011, the Pakatan Penang state government gave an ‘in-principle approval’ to reclaim 760 acres of land for STP phase 2 (Source: STP-EIA, Vol. 1, Executive Summary, page 1).

Here are a couple of burning questions the state should answer to dispel the anxieties of the people of Penang over the STP reclamation project:

  • Was the reclamation concession given in 1992 an approval in perpetuity or for a limited period to be renewed or reviewed periodically?
  • Does the state have the right to impose new requirements if conditions change at the time when the concession rights are renewed?

To clear the public’s doubts, the state should make all these land reclamation agreements publicly available and show how it could be liable for RM1bn.

The “in-principle approval”, given by the present state government in 2011, seems to suggest that the renewal was not automatic, and it has some authority and discretion in amending, if not in approving, the STP2 project.

The chief minister also emphasised that “opposing Umno’s motion would also show our disapproval (emphasis added) of BN approving 3,241 acres for land reclamation”.

Since the STP2 is part of what the previous state government approved, the logical question is why is the present state government holding a 20% stake in the STP2 project? Is this a case of running with the hares and hunting with the hounds?

An additional 4,295 acres

Back to the question of the RM1bn compensation that has been bandied about. Surely, the state was referring to projects approved in the past when mentioning this figure.

But what about future or upcoming land reclamation projects the state is planning?

The motion before the state assembly centred on the need for public consultations and hearings before projects are approved.

A week after the state claimed it had approved only 60 acres for reclamation, it was announced that three new islands would be created covering 930ha, 485ha and 323ha for a total of 1,738ha or 4,295 acres as part of an upcoming agreement with the project delivery partner to finance the Penang transport masterplan. (This appears to be over and beyond the 3,241 acres approved earlier under the BN administration and should not be conflated.)

Now, what is wrong in asking for more meaningful public hearings – that go beyond the usual EIA ‘consultations’ – for this new upcoming land reclamation? If the agreement with the project delivery partner has not yet been signed, how will the state be liable for any compensation? Shouldn’t independent impact assessments be carried out BEFORE any agreement is signed?

In any case, are all these reclamation projects in line with the State Structure and Local Plans? The former is overdue for review while the latter has not seen the light of the day even though the Penang Island City Council had approved it in 2008. Furthermore, this Local Plan and the Structure Plan under review have not been shown to the public.

Does the state government plan to continue the unsustainable policy of issuing freehold status for reclaimed land? How much weight will be given to public consultation and input on the desirability of these projects?

If the state can provide clear answers to these questions and meaningfully engage with the public, not simply treating these projects as a fait accompli, perhaps less heat and more substance would be generated and the public would be able to make more informed opinions.

Penang Forum steering committee
4 December 2015

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