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.