Boustead Holdings Bhd has announced that it has not yet struck a deal with the Penang state government on the terms of the compensation for the scaled-down Royale Bintang Hotel project in George Town’s world heritage site core zone.
The firm said the compensation may include BHB being allowed to reclaim land on Penang island.
The question to ask is, should the local government compensate or fully compensate a firm for loss of future profits or gross development value arising from something that is beyond the government’s control – in this case, a Unesco heritage listing, with its attendant zoning requirements?
Boustead made the announcement in response to an article in The Edge.
Date Announced: 15/09/2010
Subject: Newspaper Article – Boustead may get to reclaim land south of Penang Bridge
We refer to the article entitled “Boustead may get to reclaim land south of Penang Bridge” which had appeared on page 5 of the Edge Financial Daily on Tuesday, 14 September 2010.
The Penang state government had previously directed Boustead Holdings Berhad (“BHB”) to scale down its Royale Bintang Hotel project from 12 floors to 5 floors to be in compliance with the requirements of the United Nations Educational, Scientific and Cultural Organization (UNESCO) of 18 meters or 5-storey height in the core zone of the World Heritage Site in George Town following George Town’s inscription as a UNESCO World Heritage Site.
In relation thereto, BHB has been in negotiations with the Penang state government on the terms of the compensation for the said scaled down Royale Bintang Hotel project which may include BHB being allowed to reclaim land on Penang island.
However, the parties have yet to reach an agreement with regard to the compensation to be awarded to BHB by the Penang state government.
An announcement will be made by BHB in due course setting out the terms of the compensation once the same have been agreed by BHB and the Penang state government.