Runnymede demolition, and controversial swap deals

The demolition by stealth of the Runnymede ancilliary buildings, which includes Raffles House, is the latest controversy.

Contrary to prevalent thinking, the Pakatan state government in Penang is not the pioneer of swap deals (though I think it is still debatable whether they could have prevented or minimised some of the controversies that arose from them).

The BN government came up with several swap deals in Penang as early as the 1990s.

See the report above taken from the Penang Heritage Trust newsletter No. 87, June 2006. It is about a briefing provided by the Malaysian Army Second Division on the occasion of a heritage site visit to Runnymede by Badan Warisan Malaysia members on 28 May 2006. The accompanying photo is of Raffles House showing 19th Century Doric order columns.

After World War Two, Runnymede  was sold to the colonial government, which leased it to the post-war military. Runnymeade was the last British military facility to be handed over to the Malaysian government on 2 November 1971 for a token M$1. For a while, the Malaysian military then made use of the place.

Just before that, from what I understand USM was initially allocated a site in Bukit Gedung to build its campus, but following a campaign, it was decided that USM should be built on its present site in Gelugor, on which stood former military barracks. So the army was given the proposed USM site in Bukit Gedung, but little work was done while the army’s Second Infantry Division used Runnymede until 2005.

Under a deal, Warisan Pinang Sdn Bhd was tasked with building the Second Division’s new headquarters in Bukit Gedung, Bayan Lepas and Sungai Ara. Warisan Pinang was incorporated on 17 December 1994, and its main activity, according to latest company filings, is “construction of army camp, provision of management services and investment holding”.  (Incidentally, in 1994, Dr Mahathir Mohamad was Prime Minister, Anwar Ibrahim was Deputy Prime Minister, Najib Razak was Defence Minister and Koh Tsu Koon was Penang Chief Minister.)

So apparently, in exchange, Warisan Pinang was given some land in Batu Uban and the right to develop the Runnymede property. Planning permission was given in 1999, but only one of the four towers planned was constructed.

Meanwhile, Warisan Pinang began work on the Second Division headquarters in Bukit Gedung in 2001 under package one. The Second Division finally moved to Bukit Gedung in 2005. (Work on package two in Bukit Gedung and Sungai Ara began in 2003 and was completed in 2015.)

Who owns Warisan Pinang Sdn Bhd?

Warisan Pinang Sdn Bhd’s real owners are hidden under multiple layers. The company (issued capital RM10m) is owned by Citi Integrated Sdn Bhd (80%) and Lembaga Tabung Angkatan Tentera (20%).

Citi Integrated (issued capital RM4m) is wholly owned by Esquire Landmark Sdn Bhd.

Esquire Landmark (issued capital RM4m) is wholly owned by M R I Resources Holdings Sdn Bhd.

And M R I Resources Holdings Sdn Bhd (issued capital RM4m) is owned by Dato Mohd Ramzan Ibrahim (97%) and Mohd Ehsan Mohd Ramzan (3%).

So basically, Warisan Pinang is ultimately owned by Mohd Ramzan (close to 80%) and LTAT.

A former banker with an American bank, responsible for lending to the real estate sector, Ramzan is today group managing director of developer Runnymede Group of Companies, which ironically is promoting the Runnymede brand name.

Incidentally, Ramzan’s name was included in the famous list released by Umno of those who had benefited from privatisation deals. The list was released in 1998, when Mahathir wanted to thwart any leadership challenge within Umno.

See this list in Utusan:

63. Datuk Mohd Ramzan Ibrahim, LTAT, Datuk Mohamed Ikbal – Warisan Pinang Sdn Bhd (Citi Intergrated Sdn Bhd Lembaga Tabung Angkatan Tentera (LTAT Iqrah Holdings Sdn Bhd) – Penswastaan Pembinaan Kompleks Tentera Darat, Bukit Gedong Pulau Pinang….

67. Datuk Mohd Ramzan Ibrahim, Koperasi ATM Berhad dan Yayasan Guru Malaysia Berhad – Cherating Metropolitan Sdn Bhd. (Citi Integrated Sdn Bhd, Koperasi ATM Berhad, Yayasan Guru Malaysia Berhad) – Pembangunan Semula Tanah Tapak Lapang Sasar Di Sungai Dua, Pulau Pinang.

The first tower at the Runnymede site to be built is now being used by the EPF, which is a federal entity. Questions remain as to whether the approval given in 1999 should still be valid after a prolonged period of inactivity. The Penang Island City Council seems to think so.

But were a heritage impact assessment and a heritage management study undertaken? A historian who attended the press briefing by the council was taken aback when council reps seemed unaware that one of the ancilliary buildings, Raffles House, had special historical significance.

Anyway, here are some BN swap deals in Penang that stirred varying levels of controversy:

• Kampung Buah Pala land was allocated to Koperasi Pegawai Kerajaan Pulau Pinang as exchange for land owned by the co-operative in downtown Penang which was supposed to be used for expanding the High Court building.
• UDA was given land reclamation rights in exchange for creating a heritage Malay fishing village in Tanjung Tokong. Look what happened to that.
• IJM was asked to build a RM300m expressway and in exchange it received land reclamation rights for a huge stretch of prime seafront land worth billions and billions of ringgit in gross development value.
• Patrick Lim’s Abad Naluri Sdn Bhd wanted to build the controversial Penang Global City Centre project on the Penang Turf Club site. In return, the company was supposed to build a new equestarian centre on hundreds of acres of potential prime land on the mainland which it had acquired cheaply near the then proposed second Penang bridge site in Batu Kawan.
• In 2002, the BN state government wanted to give Peninsula Metroworks six parcels of prime land totalling 31ha in exchange for building the controversial Penang Outer Ring Road.

Swap deals continue to this day under both the Pakatan and BN administrations, except that the project values have soared.

Remember how 110 acres of Tanjung Tokong reclaimed land is supposed to be handed over to Zenith in exchange for building a controversial tunnel and three highways on the island (which outrageously do not require detailed EIAs).

And who can forget 1MDB’s Sungai Besi mega land deal under which 1MDB was supposed to relocate the existing military base and create a new ‘Bandar Malaysia’ at the site. We all know what happened to that.

In recent years, reports surfaced of a plan to relocate the RMAF airforce base on the mainland in Teluk Air Tawar further inland so that its present site could be ‘developed’.

And now we have the three new islands – totalling an eye-popping 4,500 acres – proposed in southern Penang Island in exchange for implementing the RM35-40bn Penang transport masterplan.

Why are these swap deals so prone to controversy? Because the negotiations tend to be carried out away from the public eye and everything seems like a done deal when they are finally made public. For a swap deal to succeed, both sides of the deal have to be successfully carried out; otherwise, the deal falls apart.

So the projects on either side of the deal can barely be cancelled, even if there are strong objections from civil society and the larger public over social, environmental or even heritage concerns.

For the council and regulatory authorities, evaluating a large project is complex enough. A swap deal makes the process even more complicated as there are two sides to the story.

The independence of the decision-making process for each side of the deal tends to be clouded or even compromised as the twin sides are intertwined, and there are even more competing interests to consider.

And how can a federal or state government be independent enough to evaluate each side of the deal if it was a party or facilitator in coming up with the swap idea in the first place? If one side of the deal fails to be approved, the entire swap falls apart. This is why the detailed EIA or other impact assessments – if there are any – are perceived to be mere formalities, just a minor nuisance.

That is why I am against swap deals. This is not a Pakatan vs BN thing. Both sides seem quite happy to indulge in such swap deals.

Ultimately, in many cases, it is the developers and private interests that profit the most while society has to bear any social, environmental and other costs that may arise.