RM20m compensation for Boustead


The Penang state government has agreed to give RM20m in compensation to Boustead Holdings Bhd for scaling down the height of its hotel in the George Town heritage zone from 12-storeys to five storeys. 

That’s more like it.

Boustead was reportedly asking for RM58m (see theSun report). That was way over the top.

The state had also been considering the award of 50-100 acres of land reclamation rights to Boustead as compensation. But Bayan Bay residents came out strongly against land reclamation in their area. Certainly, the state should not even have considered such an award, which would have surrendered over hundreds of millions of ringgit in gross development value to a private developer. After all, the application for Unesco world heritage listing for George Town and Malacca jointly was submitted by the federal government.

The Penang Forum Steering Committee has issued a statement welcoming the decision to call off the land reclamation deal. More importantly, Penang Forum is calling for a land reclamation policy to be formulated along the lines stated below:

Penang Forum welcomes and fully supports the state government’s bold decision to call off a controversial proposed agreement to allow Boustead Holdings Bhd to reclaim land at Bayan Bay as compensation for having to scale down the firm’s hotel along Weld Quay.

Penang Forum fully supports the Chief Minister’s decision for the following reasons:

Firstly, all reclaimed lands should be on a leasehold basis, not freehold.

Secondly, land reclamation should be the main source of income for the State and should not be given away to private corporations.

Third, it is arguable that compensation should even be offered by the state for a Unesco-imposed height restriction. After all, property values in George Town have risen as a result of the Unesco listing and more tourists can be expected to visit Penang. Both of this have benefited property owners and businesses in the core zone.

Fourth, Unesco listing for George Town and Malacca, was awarded at the federal level. The Federal government should also intervene to ensure the world heritage status of both cities is not at risk.

Fifth, the environmental impact of all this land reclamation must be studied by internationally recognised independent experts. As things stand, every square foot of reclaimed land represent a sacrifice by the Penang people in terms of loss of natural beaches, change of current flows with widespread change of coastal ecology, loss of fish stock, threat to the traditional fishing communities and a potential loss of a part of the Island’s culture and tradition.

The Penang state government needs to come up with a comprehensive land reclamation policy, rather than the present ad-hoc policy, that would:

  • ensure the state is not short-changed financially.
  • set up a government board, comprising individuals who have the public interest at heart, to provide a supervisory and advisory role in managing land-use and reclamation in the state. Such boards are common for hospitals, schools and other public bodies.
  • undertake a comprehensive hydrological study into land reclamation for the whole state.
    ensure land reclamation is undertaken by the state. Part of the land may then be sold to developers. The development should not only be for commercial and high-end residential use but should also include affordable housing.
  • ensure that a portion of the reclaimed land should be reserved for public use (schools, hospitals, places of worship). At least 30 per cent should be for public open spaces, including parks, jogging trails and bicycle paths.
  • uphold easy public access to the sea-front including walking and cycling trails.

In fact, this would be an opportune time to look into the long-term management of land use to prevent abuse of state land for private gain at the public expense. If not, the implications could be far-reaching as it could engulf state land on both the island the mainland.

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Let this be Penang’s last lesson of compensation for somebody’s blunder of irresponsibility. Another concern beyond the control of state gomen is Satu Lagi Projek from the Feds which holds an element of questionable safety, quality, suitability and overpriced price tag. Many may not know this difference and the blame game is conveniently played at ‘shooting down’ LGE for every conceivable ‘mismanagement’ should problem arises.
BTW, RM20m is a lot. Imagine using it to help 400 Penangite small entrepreneurs with RM50k each to go the longer miles.


Yes, imagine the fund of RM50K to assist tunglang setting up tourist attraction Penang Street Museum – sure multiplier effect.

Agreed to get Gelakan to compensate the taxpayers money for that blunder.

btw, tunglang don’t forget to watch Search coming live concert at batu Kawan (RM58 ticket sap sap sui for you). Amy wound sing Isabella dedicating to you !


Yeah, Isabella – a working class genre Rock song for the still struggling in love and careers. I am still a struggling workhorse like the rest, like I was 20 years ago in KL (reminiscing WingsBBDO). With 50K it can surely do ‘miracle’ for my struggling freelance as artist, adman and designer.
Thank you Sammo for dedicating this inspiring-in-adversity song.
BTW, Amy’s voice is so great and everlasting, I can even hear his live concert’s Isabella from the quiet night beach of Pulau Jerejak.
Dedicated to all struggling souls: Isabella


this a clear case of the blunder by the other guys, ktk & gang, boustead still bringing development to penang with its heritage hotel project…if this ppl can deliver, lge should support boustead with other projects…penang gets more develop, everyones happy.


MPPP approved the plan for the 12-storey Boustead hotel on 9th April 2007 whilst building plans received MPPP approval on 15th February 2008. Knowing the Unesco World Heritage site application was in advanced stage of award. I’m not surprised because by February 2008, the BN-controlled Penang state government was little more than a walking zombie. Pakatan Rakyat faced a fait accompli when it took over the Penang state government on March 9, 2008. If the state government had simply cancelled approval for the building , it would likely have faced a messy court case, especially since Boustead is an UMNO-linked… Read more »


this is just a case of the screw up by the other guys…boustead still bringing development to penang with the heritage hotel project…since this ppl can deliver, LGE should let boustead do some other project…penang gets more develop…everyones happy…no more saber rattling.

mui kuai fa

Quickly claim the compensation from Pulau Jerejak to foot this bill. Basically, KTK should be responsible in both these projects!! Seriously, his … is still not completely cleaned out after 3 years !!


Boustead should not be blamed because it has not taken a single cent of the so called 20 mill compensation while still bringing development to Penang with its heritage hotel project…so stop with the saber rattling

Richie Hee

Where is the Corporate Citizenship Responsibility (CSR) of Boustead?

I doubt it has any.
So I will not patronize it business outlets, until it has agreed to plough back the RM20 million for the development of Penang’s heritage.

I urge all to do the same if you agree with me.


I fancy they Boh-Steady is going to build Penang’s first Gravy Train as a tribute cum legacy of Barang Naiki & Boh Hoot Co. post 308. So LGE & his Cat’s Claw cannot stop this so called public transport amenity run on railway sleepers in the like-mindedness of Gelakan Korek Berpatutan!

Aaron A

I think the RM20 million bill can be charged to KTK’s Gerakan office in KL.


Boustead Holdings Bhd may have gain 20m but certainly lost its ‘Kamcheng’ with the Penangnites!

Andrew I

Bold v. Boh Hoot.

Ong Eu Soon

LGe first gave concession to YTI over the heritage hotel project by converting the leasehold status to freehold status under no special circumstances. LGe already open a bad precedent. LGe willingness and readyness to give compensation to developer without mounting any legal challenge is (questionable). Gerakan should bring this case to court to see is there any elements of corruption, nepotism and cronyism involved.

Nazri Aziz Bukhari

Sudahlah Ah Soon, sibuk tak henti henti! Nanti, lu mari jumpa gua di Nibong Tebal, bersama sama kita makan ” crabs porridge” in Khee Xiang restaurant, ok? All your comments against the current administration is filled with so much hate, it makes readers here “throw up” each time they read your comment. Jom ‘crabs porridge” lah! Do not trust politicians but do trusts good governance and good fiscal managements and in these respects, LGE had come out head and shoulders above the previous adminsitration. The reason being simple, the current administration, does not have to kowtow and get approval from… Read more »


Yeah, Nazri, i particularly like “…the present government does not have to kowtow and get aproval from UMNO…”

At least you are kind to Ah Soon, inviting him for crab porridge.

I thought of inviting Ah Soon for a cuppa but i think i cant handle him…

Ah Soon’s hatred towards Lim Guan Eng has no justification la…

Anyway, Ah Soon, please take good care of your aged mom as that is more important than ranting politics against Lim Guan Eng/PR.

Sze Tho

A person with no life and bitter chip on his shoulder will be blind to reason and advice. The same old drivel being repeated again and again. Such a person like Ah Soon is only interested in venting his anger, nothing else. A pitiful sight….not unlike a raving lunatic babbling in the streets…


I propose that Ah Soon should be given the Title of Boh Hood 2. Taking cheap pot shots, even LGE is right and has done the best for the rakyat,
Cukup la. Put your hood where your money is!! Challenge any PR ADUNs in Penang.

Gerakan K

This is a disappointing news for every Penangites !!! Every ringgit saved by the state will be wasted / channeled to wrong direction !!!

This is a complete incompetency, unaccountability, and stupidity by the state admin. We need a full report of why public money being wasted like that.

I think someone must resign for this mistake. RM20m = 909090 bags of 10kg rice !!! RM20m is a lot of money !!! I’m so angry, my cukai money being wasted just like that !!! Thumbs down for the state government !!!

Kong Kek Kuat

Well done, Pakatan Rakyat, DAP, PKR, PAS! Shame on YOU, GERAKAN/MCA/MIC/UMNO! UMNO, what other political capital do you have against, Pakatan Rakyat? This Government had done well, exceedingly well, and no problem, we pay the 20 million to Boustead for a problem inherited from the previous corrupt Government! With good governance, which the present administration are doing, we can easily earn back the RM20 million! No problem as this Government had been practising good fiscal governance and managements since their coming into power since March 2008! Year after year, this State, Penang, had been blessed and praised by the Auditor… Read more »

Gerakan K

Well done, Pakatan Rakyat, DAP, PKR, PAS for paying RM20m compensation ???

Boh kari lah !!!


Ummm…have you read the Auditor General’s report about how Federal Government ministries have been spending taxpayer funds ?


Losing 20 millions and saving the Heritage Zone would bring in more tourists and more millions in foreign exchange in the long run. Moreover the state govt may not win the legal battle. If it lose it not only have to pay more compensation but also the legal fee which may be astronomical. Take the case of Hee who lost and have to pay only RM100/= compensation and the legal fee of RM20,000/= Those who use their special positions or become a wannabe to obtain such position would usually think of such short term benefit which later turn into a… Read more »