Why did the Penang government sign the ‘PDP agreement’ so hastily?

22
452
The RM46bn SRS rojak

There are several things that must be clarified, in particular: what is the status of the fisherfolk’s appeal to the Appeals Board against the environmental impact assessment?

The Consumers Association of Penang has issued the following statement in response to the signing of the “project delivery partner” agreement between the state government and SRS Consortium?

Does the state government have the power to issue bonds, ie to borrow money?

The CAP statement:

The Penang state government has no powers to issue bonds to finance the three reclaimed islands project costing RM11bn without the approval of the federal government.

Article 111(2) of the Federal Constitution makes it abundantly clear that a state is allowed to borrow, for a period not exceeding five years, from a bank or other financial source only with the approval of the federal government.

Further, under Article 111(3), a state shall not give any guarantee except with the approval of the federal government.

By issuing bonds, the government is borrowing money from the bondholders. When investors buy government bonds, they are lending money to the government in exchange for interest and the return of principal at maturity. The government is the debtor and the bondholder the creditor.

Thus, in view of the Article 111 restrictions, how can the state government raise funds for the mega project by issuing bonds without getting the approval of the federal government?  Any attempt to do so will be illegal and unconstitutional.

It is strange that the state government sought advice from financiers, and not the attorney general or the state legal advisor, on whether federal government approval is needed to issue its bonds.

READ MORE:  250 fishermen march to Parliament in 'PenangTolakTambak!' protest

This raises a serious question on the functioning of the state government. Is it being run by businessmen or by elected members advised by constitutionally appointed officials?

Why was the state government in a hurry to sign the agreement with SRS Consortium – which is made up of Gamuda Bhd with a 60% share, Ideal Properties (20%) and Loh Poh Yen Holdings (20%) – when major issues have not been resolved?

There is a challenge to the approval of the environmental impact assessment for the project in the Appeals Board which has yet to be heard. Is the government so confident that the decision would be in its favour?  What happens if the decision is against it and in favour of the fishing community? The rakyat will have to bear the claims, if any, arising out of the contract.

The issue of financing the project has not been settled. The government has no idea as to how to raise the funds except to rely on the consortium to “propose a plan on how to finance the project”. Why not seek assistance from the Ministry of Finance or the Economic Planning Unit? Why rely totally on the private sector with vested interests?

It is highly irresponsible for the government to burden itself and the people with legal commitments to the consortium when there are so many uncertainties in the economic environment today, arising principally out of the Covid-19 pandemic.

Many economists are predicting a serious recession, even economic depression. Projects are being shelved and large companies are going bankrupt. Forbes reported: “Some of the biggest names in corporate America are in danger of going the way of Sears, Blockbuster and RadioShack.” In this adverse economic environment, the state government has inked the agreement with the consortium.

READ MORE:  Concerned Penangites hold flash mob against Pan Island Link, massive reclamation

Penang Chief Minister Chow Kon Yeow said that the reclamation of “Island A” to the southeast of Penang Island would be given priority so as to cater to the booming manufacturing industry at Bayan Lepas.

However, there is no “boom” that we know of in the Bayan Lepas industrial area. What we hear about is retrenchments and lay-offs of workers.

If space is needed for industries, there is plenty of land in Seberang Perai. Why concentrate all development on the island? It makes no sense that, despite the availability of land for industries, the government wants to undertake massive reclamation of the sea – which will have disastrous consequences for the environment, fisheries and the socioeconomic status of the fishing communities.

Chow said the “Penang Transport Master Plan” (PTMP) was of paramount importance to improve the worsening traffic situation in Penang.

The PTMP was drawn up by the consortium of developers and contractors and not by an independent traffic consultant. The cost of the PTMP is exorbitant, amounting to RM46bn. The reclamation project will cost RM11bn and would take over 35 years to complete. The focus of the consortium proposal appears to be increasing the land bank and not alleviating traffic congestion.

Civil society organisations have criticised the PTMP with facts and figures and proposed a much cheaper alternative to ease our traffic problems without having to resort to the disastrous reclamation of the seas.

The state government has turned a deaf ear to their appeals and stubbornly insists on proceeding with the RM57bn mega projects which will place a terrible financial burden on the people. It has been reported that the consortium will receive 5% of the cost of the project, which will run into billions of ringgit.

READ MORE:  Taiping listed in Sustainable Destinations Top 100 list

We call on the Penang state government to release for public viewing the agreement signed with the consortium and to reveal whether there is any exit clause in it. The federal government should not approve the issue of any bonds by the state or guarantee loans to finance this mega project.

Mohideen Abdul Kader is president of the Consumers Association of Penang

 

 

Please help to support this blog if you can.

Read the commenting guidlelines for this blog.
Subscribe
Notify of
guest
22 Comments
Most Voted
Newest Oldest
Inline Feedbacks
View all comments
Kim Poh Poh
Kim Poh Poh
7 Jul 2020 5.24pm

The foremost priority of Penanv government is to create wealth among Penangites so that they have disposable income to indulge in whatever new developments like fine dining on reclaimed shores.

Develop human thinking minds. Eg Set up digital libraries with cozy environment condusive to learnings instead of letting the vulnerable youths to succumb to gaming, basikal lajak, smoking….

YMT
YMT
11 Jul 2020 4.34pm

Malaysia has been flooded with five million foreign workers, including those without permit, because of over-reliance on hard labour, says Senior Minister Azmin Ali.

He said the Covid-19 pandemic had triggered the need for industry players to quickly shift to automation and robotics to reduce reliance on a massive foreign workforce.

https://www.thestar.com.my/news/nation/2020/07/11/azmin-m039sia-flooded-with-foreign-workers-must-shift-to-automation

Ha ha ha! It took so long to realise this problem! Likely because many locals cannot find job.

glissantia
glissantia
7 Jul 2020 1.30pm

To expand on what you said on economics, the covid-19 and other crises have exposed much of the delusional underpinnings, e.g. A large part of the economy, and jobs themselves, is fluff: meaningless to our wellbeing. However, the most critical people are still being exploited. Greed has almost destroyed the petroleum industry. The mad Empire may also break the supply chain at any time. Energy may become too expensive or unavailable. This (energy) threatens non-essential transport, tourism, cars, and all related industries and infrastructure including real estate (urban sprawl, lifts, etc.), and highways. There is no solution yet to insane… Read more »

glissantia
glissantia
8 Jul 2020 4.21pm
Reply to  glissantia

Malaysia has no real social protection safety nets. Cash aid may be very minimal.
Such aid is not a substitute for structural policies such as housing.
The official poverty rate of 0.4% is unrealistic.
– United Nations Special Rapporteur on extreme poverty and human rights, report released July 06

Covid-19 could drive another 70-100 million people into extreme poverty this year.
– World Bank

https://www.malaysia-chronicle.com/?p=191443

So as not to make this more depressing, I will skip over the findings on stunting, starvation and obesity in children.

Bonus question: Do you think you will be unaffected by this inequality in thecountry?

YMT
YMT
9 Jul 2020 7.40am
Reply to  glissantia

By not signing ICERD means acknowledging (and recognising?) the existence of inequality in our society? Perhaps to much fear in socialist system, although the people clamouring for social handouts, electricity rebate, fuel subsidies, traffic fine discounts etc?

XiaoXiong
XiaoXiong
11 Jul 2020 3.27pm
Reply to  YMT

Icerd cannot because we have monarchy?

I think this is the reason. What you think? Any other reason?

YMT
YMT
11 Jul 2020 11.46am
Reply to  glissantia

Malaysia is a country blessed with many natural resources that is seeing poverty growing due to a deeply entrenched culture that prioritises self-profit among a small band of those in power, Anwar Ibrahim said.

https://www.malaymail.com/news/malaysia/2020/07/10/anwar-says-malaysia-rich-but-many-people-still-poor-due-to-ingrained-rent-s/1883386

If you spend more than you can earn, with loans and borrowings, how to get rich even with NEP? So do not envy those with astute financial management and able to save to be rich.

glissantia
glissantia
13 Jul 2020 1.36pm
Reply to  YMT

We have no disasters, extreme weather or population pressure. Instead, we have pleasant weather, many natural resources (including pleasant weather, tourist attractions and central location) as well as human resources (entrepreneurs). Yet we are going backwards every decade at the national, personal/family and environmental levels. The 1960s may have been the exception. Bolehland is truly a world-class.

shriek
shriek
16 Jul 2020 7.55pm
Reply to  glissantia

No natural disaster but have man made ones. After 60 years and every election, talking about development we are still in disaster.

PCH
PCH
16 Jul 2020 11.04am

https://aliran.com/aliran-csi/pakatan-harapan-debacle-a-clash-of-narratives/

2 different narratives need to be put in right perspective.

glissantia
glissantia
14 Jul 2020 7.42pm

Daily, we see news (photos or videos) of those in power — and their families — demonstrating their privilege by flouting the MCO rules imposed and enforced on the rest of us.

Srikanan
Srikanan
10 Jul 2020 10.51am

Now not to criticise Pakatan, The current federal government of PN is worst off.

This blog need to highlight the ills of current policies of PN.

glissantia
glissantia
9 Jul 2020 3.45pm

Sarawak to implement ART. Costs far less than LRT/MRT. Is the Penang govt. worried?
https://www.freemalaysiatoday.com/category/nation/2020/07/08/transport-expert-hails-sarawaks-shift-from-lrt-to-art/

shriek
shriek
12 Jul 2020 7.04pm
Reply to  glissantia

Pengland is a tourist island. What more befitting is a tram. Kids will pester their parents to have tram rides. Singland does not have trams and will draw visitors from SE Asia region. Otherwise why bother to come to Pengland?

T-lang 4ever
T-lang 4ever
13 Jul 2020 8.00pm
Reply to  shriek

Bother to be in Penang because of street food which are so much cheaper for foreigners who can swap their string currencies for weakening ringgit to “chiak pa pa”

shriek
shriek
14 Jul 2020 8.00pm
Reply to  T-lang 4ever

go to pengland to eat only is not chip chip. pengland food more expensive and not as good as I poh. i poh is more historical than peng land.

YMT
YMT
7 Jul 2020 3.19pm

Anil must be very pleased that MACC is hauling up many Penang state exco reps for questioning on this matter.

YMT
YMT
7 Jul 2020 5.35pm
Reply to  Anil Netto

GEORGE TOWN, July 7 — Penang Chief Minister Chow Kon Yeow was today present at the state office of the Malaysian Anti-Corruption Commission (MACC) in Jalan Sultan Ahmad Shah, to give his statement (4 hours!) on the Penang undersea tunnel project.

shriek
shriek
12 Jul 2020 7.07pm
Reply to  YMT

Mata orso haul up reporters. HK only think that demo place means one can talk any thing and any time?

shriek
shriek
17 Jul 2020 8.43pm
Reply to  YMT

too bad, we gostan. imagine what kind of sexist and racial telling she man to put powder to brighten up. what is this loyAr speaker doing?