Bayan Bay: Penang calls off Boustead land reclamation deal


Heeding Bayan Bay residents’ protests, the Penang state government has called off a controversial proposed agreement to allow Boustead Holdings Bhd to reclaim land as compensation for having to scale down the firm’s hotel along Weld Quay.

Boustead had obtained approvals for a 12-storey hotel under the previous state government and before George Town received its Unesco world heritage listing.

Under a compensation agreement, Boustead would have been allowed to reclaim “a minimum 50 acres of net saleable development land area along the coastal area off Queensbay on a freehold basis” in exchange for reducing the height of its hotel from 12 storeys to five storeys. (To me, that sort of compensation would have been way too excessive. Also, certain activists have argued that reclaimed land should be alienated on a leasehold basis and not granted on freehold.) The agreement, which was supposed to have been signed on 27 June 2011 in a ceremony, was however postponed.

The saga is not over. Boustead submitted amended building plans on 21 June 2011 to scale down its hotel from 12 storeys (300 rooms) to seven storeys (180 rooms).

Boustead will still be required to comply with the World Heritage building height control of 18 metres height within the heritage core zone in George Town, said Chief Minister Lim Guan Eng. “The form of compensation to be paid and whether it should be paid, is still subject to further negotiations with (the firm).”

An added complication is that Boustead is now suing Pantai Jerejak Adun Sim Tze Tzin over his remarks defending the interests of his constituents in Bayan Bay – a move the state government views “with displeasure and is a form of pressure exerted on the state government”.

What do you all think? Should the state/public compensate Boustead for having to live with Unesco-imposed restrictions – and if so, what would be a fair compensation?

A counter argument is that Boustead’s scaled down hotel could still profit from the Unesco listing, which could draw hordes of visitors to George Town, so why compensate?

Guan Eng’s statement in full:

1. Background

“CADANGAN MENDIRIKAN 1 BLOK HOTEL (300 BILIK) 12 TINGKAT DENGAN TEMPAT LETAK KERETA DAN PEMULIHARAAN BANGUNAN WARISAN SEDIA-ADA NO. 1 & 2 PENGKALEN WELD, DI ATAS LOT 723, 724, 725, 235, 719 DAN TANAH KERAJAAN (PLOT 1 & 2 YANG TELAH DIBERIMILIK), SEKSYEN 23 GEORGETOWN, PULAU PINANG UNTUK TETUAN BOUSTEAD HOLDINGS BHD” (“the Project”) to comply with the World Heritage Building Height Control of 18 meters within the heritage core zone in Georgetown in consideration of the State Government/MPPP compensating BHB in the form, terms and conditions hereinafter set out.

Details of the Project

The Project originally comprised the development of a 12-storey 4-star Hotel with 334 modules or 293 keys and the restoration of a 3-storey Heritage Building at No. 1 & 2 Weld Quay, Penang, on a 1.195 acre site.

Planning approval was obtained from MPPP on 9th April 2007 whilst building plans were approved by MPPP on 15th February 2008.

Works on the Project were halted in 2009 due to conditions imposed by the United Nations Educational, Scientific and Cultural Organization (“UNESCO”) for Georgetown’s World Heritage City status.

3. Salient Terms

i) BHB agrees to submit a revised building plan for the Project for the approval of MPPP which will not exceed the height of 18 meters in consideration of the State Government/MPPP agreeing for BHB to reclaim up to 100 acres or as sufficiently needed to provide for a minimum 50 acres of net saleable development land area along the coastal area off Queensbay on a freehold basis, to be formalized via a Reclamation Agreement.

ii) A signing ceremony was initially planned on 27th June 2011 with Boustead Holdings Berhad (“BHB”) to enter into an Agreement with the State Government and MPPP. In that agreement (strictly without prejudice) BHB has agreed to revise the building plans of their hotel project by reducing from 12 storey to 5 storeys in exchange for compensation in the form of the reclamation project. However the signing ceremony was postponed by the Penang Chief Minister, over the objections of BHB, as he wanted to listen to the Pantai Jerejak Assemblyman YB Sim Tze Sin and the views of the residents in the surrounding affected areas.


I) After much public consultation, the Penang State Government has taken cognisance of the views of the residents of Putra Marine, Gold Coast and Bay Garden and decided not to pursue the land reclamation at Bayan Bay to BHB. This decision by the Penang state government is also pursuant to the legal notice of defamation sent by BHB to YB Sim over his public remarks in defending the interests of his constituents, which the state government views with displeasure and is a form of pressure exerted on the state government.

II) As the Penang state government only submits to the people of Penang, to pursue the land reclamation deal with BHB under the shadow of the legal notice of defamation sent by BHB to YB Sim is wholly inappropriate. Boustead Holdings Bhd (BHB) will still be required to comply with the World Heritage building height control of 18 meter height within the heritage core zone in George Town. The form of compensation to be paid and whether it should be paid, is still subject to further negotiations with BHB. Boustead Holdings Bhd (BHB) submitted the amended building plan on 21st of June 2011 and to scale down from 12 storeys (300rooms) to 7 storeys (180 rooms).


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Penang CM, our beloved Lim Guan Eng is much to be praised as he works with the people and for the people, and not like other BN’s politicians work for their pockets.

Long live Lim Guan Eng, DAP/Pakatan !!!

Ong Eu Soon

RM30 million compensation for Boustead? Long live Lim Guan Eng?

Sze Tho

Yes LGE again. Since you are so smart… recaliming land, no compensation what is your smart idea? Typical empty vessel….all noise no substance.


I have done work for Asian Global Business . They’re the ones who are developing Weld Quay called the Rice Miller. They have also been affected by the Unesco Heritage requirements. Their 12 storey hotel has been reduced to 5 stories. Most of the existing buildings will be refurbished by them. They have been compensated in other ways, but not like Boustead’s excessive freehold status on reclaimed land. Who offered and approved this deal? It’s way, way excessive in my opinion. LGE should not give way. I’m thinking of how Penang would be in the next 250 years. Penang Govt.… Read more »


there’s still much undeveloped land around balik pulau area. It could be given as compensation. definitely not for high-end or prestigious development but i think its a much more appropriate compensation.
It would still be profitable for boustead as many young familes are choosing to buy landed property there, because on the west side of island property prices are exorbitant and out of reach for them.

Gerakan K

Calls off or postponement for election ??? On the other hand, is that hudud by pakatan is call off or postponement because of GE ???

Click thumb down if you believe it is just a delay ~

Andrew I

The king of delay is your Mr. Bo Hood. Doesn’t know when he’s not wanted. Kopi O kau kau.


The sacrifice to be made by KTK is to make way for young Gerakan leaders to take over. Never mind they cannot win this time but they are preparing to be an effective opposition. When there is no hood, there is no descendant. That’s the only hope for the new Gerakan generation.

It is said that Lotus Tan Lian Hoe was (allegedly) asked by Umno to urge KTK to step down. Lotus Tan (may be) thinking of taking on Nga at Taiping. Good luck to her.


Please, grerakan should just ride off into the sunset.

KTK has managed to ruin Gerakan by bringing in (allegedly) corrupted and inefficient persons into the state government. What new projects has he implemented since taking over from Lim Chong Eu?

I view KTK as a piece of … just let him be to rot …


That last “Click thumb down if you believe it is just a delay ” line is a cheap trick, Gerakan K.

I ignored it when I clicked the “thumbs down”!

Andrew I

What to do? Desperate times call for desperate measures.

Ong Eu Soon

Election coming! No choice but to give in to demand of the people. One small victory for Penangites. LGe started to feel the pressure as all pro-LGe media now refuse to publish any of my statements. This will push me to forward my letters to the main stream medias and reach out to wider audiences. All this while I have tried to contain the damages that I imposed on the state government by confining my views at Anil’s blog and a few pro-LGe internet media. It is time for WAR. LGe must go! Next we should ensure that LGe give… Read more »

Syiok Syiok

RE : LGe must go

Ah Soon
Who & where are you running for in PRU-13 to replace your nemesis current Ketua Menteri ? Bagan ?
You have so many ideas and let’s see how the Penang people’s receive you and your financier, ok ?

Ong Eu Soon

Sorry! Politic is not about getting elected, it is about getting rid of the elected!


… wake up your ideas.

Sze Tho

….Ah Soon and his syiok sendiri sense of grandeur.


Ah Soon Kor forever syiok sendiri, really pity him !!!

Andrew I

Ha. Children weren’t used as shields this time round, Gherkin.

Good decision, Guan Eng. There has to be some kind of balance between development and social concerns. If not, where will it all end? I think the people of Penang appreciate that whilst we don’t want to burn our bridges with developers, a line has to be drawn when arm-twisting is perceived.

It’s a new dawn. Either you play by the rules, or you know where to put your proposals.

Nazri Aziz Bukhari

Do not know who you are referring to as Gerkhin, Andrew. Remember, he can be Osama Boh Kari, stupidty shown as Boh is well known for its tea. He can come in as Ang, Tan, anything just to suit his whims and fancies and it is a waste of time to exchange ideas with dudes like him. You take good care of him, Andrew, you had done well. Pursue him till his pant drops! Still living on cloud 9, dreaming that Gelakan can make a comeback! You read what Kalabangan said yesterday of what they did in Tawau? Gelakan was… Read more »

Osama Boh Kari

Welcome back ~

… apanama still there to plan for mama victories.

La la la, don’t believe the call off story, it is just because election election election is coming ~ la la la ~

Revenge time for gerakan in Penang !!!

Andrew I

Revenge? Grek-cannot even get their act together. What revenge are you talking about? Oh, you mean Mr. Bo Hood taking back his pants from his lady chief?

Nk Khoo

Congratulate to LGE for listening to rakyat. I have to remove one item from PR white elephant list after this bold and sound decision.

Get the state lawyers to study the planning and buildings plan approval to see the state can legally stop the project or not according to the Heritage Act.

Let fight it in the court first and compensate Boustead if the state losing the case.

Syiok Syiok

Yes, go to court with Boustead and must have KTK & Hock Nun present as well to be accoutable before further rakyat money compensation if necessary.


Yeah, why should LGE answer for Boh Hoot & Hock None (Boh Luck).
Drag them Barang Naiki minions to court!
Have them sweat out answering in court instead of in cool-breezed Botanical Garden surrounded by …-carrying gang.