Pulau Jerejak cost Penang RM30m, says CM

By Debra Chong, The Malaysian Insider

Turning Pulau Jerejak into an island resort has drained Penang of RM30 million, its chief minister said today.

The 362ha island off the eastern coast of Penang once served as a penal and leper colony but was turned into a resort by a joint venture company approved by former Barisan Nasional (BN) chief minister Tan Sri Dr Koh Tsu Koon.

Lim Guan Eng, the current CM from DAP, said the remodelled island was now run by Tropical Island Resort (TIR), which owed the state RM10.6 million in unpaid land premium.

He said that the amount, coupled with the state’s investment arm previous RM19 million loss, brought the total to RM30 million.

“Unfortunately, I had made a mistake because the overall loss to the state government is not only PDC’s RM19 million,” said Lim who is also PDC chairman.

“But [also] the state, through its land administration and minerals [office], had to bear a loss of RM10.6 million because TIR failed to make land premium payments for 80 acres of the land it was given on Pulau Jerejak,” he added in a media statement today.

PDC holds a 49 per cent share in TIR and had poured some RM15.5 million as investment before giving it another RM3.6 million loan.

The company was a joint-venture project with the federal Urban Development Authority (UDA) Holdings, which Lim said was approved by his predecessor Koh.

Lim had first raised the issue at a news conference yesterday, when he blamed the alleged mismanagement on his predecessor.

The DAP secretary-general accused the Gerakan leader of giving away valuable land in Pulau Jerejak to UDA during the latter’s 15-year administration.

Referring to a state report on the issue, Lim said TIR’s application for land on Pulau Jerejak was made on November 19, 1997 and was approved by the then Barisan Nasional (BN) state government on January 15, 2001.

The lease was for 60 years, and will expire on October 10, 2062.

The report noted that land premium charged by the state amounted to RM12.95 million at an annual rate of four per cent, and was to be paid back over a period of 10 years from 2004 to 2013.

To date, TIR has only paid RM4.63 million, including RM470,000 in interest, Lim said.

 The amount still owed is RM10.6 million, including RM1.81 million in interest, he added.

“TIR cannot afford to pay back by instalment based on the plan set by the state because the company does not have a good financial record,” said Lim, who trained to be an accountant before making politics a full-time career.