RM2bn private hospital expansion project alarms nearby residents


A RM2bn private medical tourism project on a 6.4-acre site near Island Hospital in Penang has alarmed nearby residents who worry about congestion in their quiet neighbourhood.

The land for the “Island Medical City” project once belonged to the Penang state government. It was previously the site for homes of top civil servants in the state. But poor maintenance resulted in some of the bungalows being demolished and others lying vacant. Part of the area has since been used to park underutilised state government vehicles.

The surrounding neighbourhood comprises mainly double-storey houses or apartment blocks of up to five storeys, which seems to have been the height limit for the area – until news of an expansion project for nearby Island Hospital hit the news.

The Penang state government entered into direct negotiations with an interested party. The land was sold via Chief Minister Inc under a 99-year lease – without an open tender – for RM156m. That works out to just RM500-plus per sq ft – which would seem a bargain for the area, especially if it was going to be rezoned from residential use to commercial use. One resident said the bungalows in the area are going for RM600-900psf. So is this RM500-plus psf selling price for the land based on residential land use or commercial land use?

Moreover, only RM30m was reportedly paid upon signing the agreement with the balance to be paid upon obtaining a hospital licence within two years. Is this normal practice?

The project is being be allowed to soar above the surrounding low-rise neighbourhood. It comprises:

  • a 12-storey hospital-car park block (in two phases) with an underground passageway below Peel Avenue to the existing Island Hospital complex
  • an 8-storey car park-office-workers’ hostel block
  • a 33-storey 440-room hotel (under the planning permission, the one acre site for the hotel may be changed anywhere on site)
  • a 36-storey medical suite tower (380 units)

The site is close to five other hospitals: the Penang General Hospital, Loh Guan Lye Hospital, Penang Adventist Hospital, Gleneagles Hospital and Island Hospital with a total of about 2,300 beds. Isn’t that an over-concentration of hospitals all within a few kilometres of each other?

So far, some 100 nearby residents have signed a petition against the project. Some have attended a hearing while others didn’t receive letters in time for them to object. They worry about thousands of people converging on their neighbourhood and parking indiscriminately, the problems of toxic waste disposal, and the noise and dust from construction. Some parts of the road may be widened – but stretches beyond the immediate site may be impossible to widen.

The larger question of course is why are we allowing the expansion of private healthcare when the land could have been used for affordable housing or the expansion of certain facilities of the Penang General Hospital, now bursting at its seams.

Shouldn’t this be another mega project that needs to be reviewed – especially given the lack of an open tender for others to bid? Even if it is supposedly a “game-changer” (that jargon which one sustainable development expert said always makes him prick up his ears), wouldn’t other firms operating private hospitals and hotels have been interested in bidding as well? Don’t these local firms create jobs as well? So why are “foreign investors” being exempted from open tenders on the sale of government land?

Other questions need to an answered: What are the height and density rules governing the area? What is the plot ratio for the hotel? Were exemptions given for any infrastructure contributions payable upon rezoning and imposed on floor areas in excess of the permissible plot ratio? If so, on what basis were such exemptions given?

After all, the hotel could also benefit from investment tax allowances which would allow up to 60% of capital expenditure to be deducted from statutory income, possibly allowing the firm to save millions of ringgit in tax.

What about the public interest? Wouldn’t the Ministry of Health have been interested in additional land being available so near the congested Penang General Hospital, so that it could spread out some of its crowded public facilities? Why are we pandering to medical tourism when there is already a shortage of specialists in government hospitals for local patients?

There are also enough hospital and hotels in the area, and this site could have been used for affordable housing for their workers so that they needn’t have to commute from so far and contribute to traffic congestion.

The nearby residents submitted their petition to the MBPP last August over worries of congestion and noise pollution – but so far much of their anxiety remains unaddressed.

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Actually the surrounding houses can benefit from Airbnb rentals by medical tourists.

Buildings cannot cause traffic congestion but cars can.


Many still couldn’t see the forest for the trees.
Traffic congestion is caused by booming car population, not the hospital.


My neighbour makes money from Airbnb (rent one room) and drive part time Grab at night. Can cari makan if you have the will. But I advise his son to take up TVET to master a vocational skills, instead of going to local university and saddled with PTPTN debt and useless degree.

Fai Gan

Penang patients now have to wait long long at local hospital.


So no harm have additional or new hospital.


Penang island has always been dynamic and growing since the days of Francis Light. What’s wrong with a new private hospital? It should be looked as just like any other new business venture that can provide medical services, generate more jobs and create economic opportunities for the locals.

Chan Kim Beng

We need a proper Central Park in Penang. No more massive development please.

Heng GS

A central park if present on Penang will be encircled by parked cars, just make sure enough plants to absorb the carbon emissions.


Pulau Jerejak…the ‘green’ lung of Penang


If central parking, then it has to be big; many parking space. Then it is very difficult a parking space as everyone converge there. Spend more time Ronda in circle, clockwise and anti clockwise to look for vacant spot. End result more co2 into the air and Penang gets more heavy rainfall


A major contributing factor is t CO emission frm cars polluting our air affecting our health n hence t need for more hospitals.
V r heading towards a gridlocked city n shd discourage car ownership n improving public transport.


Hv car park facilities to park n ride in all districts n improve our public transport system, not by building highways.
No more additional cars on Pg roads, it has reached its saturation pt.


According to the Department of Statistics Malaysia, senior citizens aged 65 and above constitute 6.2% of the total population in 2017 and the number shows a steady increasing trend. The country is expected to reach the “ageing population” threshold by 2020 where more than 7% of Malaysians are of old age. Ageing population continues to strain the healthcare sector. Thus long wait at private hospitals? The number of admissions of elderly patients into hospitals will increase. More hospitals would be needed to be built and services which need to be introduced or further developed, especially in relation to the care… Read more »


Rich people can go to private hospitals, free up public hospital spaces for the poorer ones.


Good reasoning.


Can create nursing jobs for B40.


That’s the way to look at the bright side of life, Mr Ganapathy. Less cynical will make your life more meaningful and less stressful.

Nursing job is honourable and offers good salary. Great demand as Penangites get old and require nursing care.


As you get older, get more active.
Go for the outdoors, live less stress (by being debtless + no to bin-chui), eat sensibly & meditate in nature.
And don’t be distressed by the peer-led consumerism today.
If you cannot afford it, just forget it. Why work your life (& suffer) just to get it?
Anyway, life is not all about materialism nor bin-chui. It’s about you.


Can emulate Singapore: CareShield Life, use of Medisave for long-term care, and ElderFund – will provide all Singaporeans with better protection and assurance for their long-term care needs, for life.


YB Loh

Hospitals should be provided and regulated by the government just like schools. Malaysia is going towards privatisation for these things. The doctors in private practice are driving all the most expensive cars and staying in bungalows 10 million ringgits and above while public Hospitals are always short of doctors


Orso same as private schools and private universities like utar??

Hillside Resident

TOP grade Private secondary schools in Penang like Uplands, POWiS, Dalat are charging RM30k a term (NOT a year) and recently all of them just increased the fees. Primary TOP private school like SCIPS are about RM20k a term.
UTAR is just mass producing Low level workers, degrees and diplomas not recognised overseas at all.


When you have spent a lot of personal money on education, need to get high salary from ROI point of view, unless you are on scholarship and bonded to serve your sponsor.


I have a friend who studied in an international school, worked as a copy writer & then in IT. Her mom is a Swiss national, dad a Malaysian.
But some of my local friends who just have local diplomas fared better.

Not all international school qualifications guarantee you a high pay job in Malaysia except for their education quality of personal development, creative thinking & independence.

Heng GS

Depend on the hiring bosses. If he or she graduate from local government colleges or universities, they prefer those from local institutions who they can identify more with. Foreign syllabuses train students to be less exam oriented and more vocal to put ideas across, and not many local managers like to be ‘challenged’, they prefer more subdued ‘ikut perintah boss’ local graduates.


Own car, OK.
Drive car, OK.
Traffic congestion, not OK.



Penang Hospital, which is the hub for healthcare in the northern region, is in a crisis after it became known that it is struggling to meet the demand for surgical procedures and maternity care.


Ma jiji

It is true a valuation of RM500 psf at that vicinity is way too low. Even now, the filthy Jln Alor back-lane in Bukit Bintang KL area is fetching RM4000 psf ! Any catch here ?


If you call this not a proper urban planning, not a proper medical tourism development, then you shouldn’t just simply throw out AFFORDABLE HOUSING for this land. Anyone would know, if we simply build affordable housing at any prime land without consider the cost, it is not wise to allocate such resources for affordable housing. Build 100units of LCH at prime land, you can build 1000units at other places, but it’s still in town area with good public transport. Again, high rise in such area is not a problem, as long as we got public transport, and high dense is… Read more »

Ah Hua

Old issue already…was brought out by Gerakan’s Jason Loo before the GE14.


This is new issue: Renault and Peugeot parent PSA are launching an electric car-sharing scheme in Paris.


Time to reduce car ownership to prevent further traffic congestion and pollution.


Old issue need reminder is still no sign of public library at Bayan Baru. YB Sim please honour your janji.

Hillside Resident

In UK, the Hospitals are under NHS and Doctors are under government salary scale enough to live but certainly not high. In Penang, Doctors aim is to be in private practice to drive the best cars and stay in the largest bungalows. Refer to latest article in free Malaysia Today where there is shortage of OT and doctors


Pg always centre of universe. B.B. is part of golden triangle. At night, just go to jln.alor. ah pek will find his favourite one ton mee.


Now, if you go to GH as early as 8am for an appointment with doc or seek treatment, the chances are you will not get a parking space, not even in the 5 floors car park block. My only chance (try my luck) is when I go to donate blood by flashing my red donor’s book at the security guard if any space available in a 2-cars parking zone. My suspicion is outsiders are also using the car parks on their way to work. This has not been resolved since I last spoke about it to a doc @ GH… Read more »


Same insufficient car park lots at JB’s Sultanah Aminah hospital where people park their cars before proceeding to Singapore to work.


The root cause is too many cars on the road and situation will get worst with GST-free cars and Malaysians shun public transportation. Most roads have lost one lane to illegal parking, compounding the congestion problem.

Heng GS

Most doctors, lawyers, insurance sellers and some accountants only care to enrich themselves before truly serving the folks.


No money how to donate? So one to enrich in order to donate


Did you donate to Tabung Harapan, or tabung bebas Najib?


Its only take place if all parties agrees the development .wrong time if abuse the law. But some how if… https://t.co/E585Y96Nri

syawal™ シ

What is local expectation?


Relocate the hospital to mainland Prai – most Penangites have cars and they could put up with traffic congestion even in times of emergency on the way to the hospital in the comfort of their personal cars.


My assumption: most private hospital doctors will avoid working in mainland. Even if hospitals provide helicopters for daily commute.


Doctors are to serve, not to pick and choose.


When you are old and sick require operation, you would wish that a hospital is nearby.

So stop complaining.


Buy medical insurance at young age, less worry when you are old and sick.

Do not just live for today, plan for the future. Expect no welfare state here.


Buy policy at young age when premium is low and affordable. B40 for goodness sake please practise family planning, else many children means everything else is unaffordable.

Unlike the old kampung days, urban B40 no longer needs many children to provide labour in the farm.