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.