NGOs, BN REP NOT CONVINCED BY GUAN ENG’S RM707m BUDGET EXPLANATION

RM707M: Loan to state investment arm a manipulation of figures, says Jahara

ANON-GOVERNMENTAL organisation and the opposition here have questioned Chief Minister Lim Guan Eng’s explanation over the inflated RM707 million budget that has been allocated for his and the state secretary’s office for next year.

State opposition leader Datuk Jahara Hamid said Lim’s explanation, that the significant increase in allocation for both offices was due to a loan to state investment arm Penang Development Corporation (PDC) to build a land bank, did not make sense.

“PDC had been acquiring land for ages... for example, in Seberang Jaya and Bandar Perda. However, it was never through loans from the allocation to the chief minister’s office and state secretary’s office.

“It had always been through different methods, such as using money from a consolidated fund,” she said.

Jahara said PDC used to have a large stock of land, but now it was forced to acquire land with a RM600 million loan.

“This means PDC is required to pay back its loans within a certain period, which puts the pressure on PDC to develop the land.

“This is not easy as it takes time for the land to mature before it can be sold, like the Batu Kawan land, which was sold years after it was aquired,” she said, adding that the Batu Kawan land was acquired for about RM0.30 per sq foot and sold for more than RM40 per sq foot.

She noted that the state government made a huge profit from this sale and questioned why it did not use the profit to buy new land.

“Today, the state government increases the allocation and at the end of the year it will say: ‘Look, we have added our revenue’. But the people had forgotten that this was the loan repayment.

“This is a manipulation of figures, just like when it restructured the assets of Penang Water Supply Corporation (PBAPP). At that time, the state government said it had reduced the state’s debt, but actually, it pushed the assets of the state to PBAPP and the Federal Government.”

She said people who did not understand the financial figures ended up believing the state government’s manipulation.

She was commenting on Lim’s explanation yesterday that the actual expenditure for the chief minister’s office and the state secretary’s office was not much different from this year’s RM161,588,160. He, however, said the budget was at RM707,611,840 because of the loan to PDC.

“This year, we have decided to give PDC a RM609,900,000 loan to acquire land and build a land bank in mainland Penang.

“This land bank will be used to develop mainland Penang so that there is a balance in the development of the state.

“This loan, which is reflected in the budget, is what inflated the budget,” he said at a press conference on the sidelines of the state legislative assembly sitting here yesterday.

Lim said PDC would pay the state back in stages.

“When PDC pays us back, we will channel RM150 million for flood mitigation, another RM50 million will come from PBAPP, and the remaining RM20 million from the Penang Island City Council and Seberang Prai Municipal Council.

“This mean that the RM220 million for flood mitigation comes completely from the state government.”

However, his explanation raised more doubts among NGOs and politicians alike.

Meanwhile, Malaysian Nature Society Penang branch adviser D. Kanda Kumar said as a profit-making business entity, PDC should have its own finances to buy whatever land it wanted and not take up such a huge loan with the state government.

Kanda said Lim, as PDC head, should know this basic business principle by now.

“Where is it going to buy the land? It is okay if the land is developed to benefit the people later.

“However, at the rate the state government is selling off the state’s land, we are worried about what will happen to this land in future.

“Many pieces of land have been sold, but where did the money go?” he asked, urging the state authorities to show how much PDC had made from the previous land transactions.