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CM denies Peel Avenue land sale was ‘one-man decision’

 | May 31, 2017

Lim Guan Eng says state executive council endorsed sale.


limguangengGEORGE TOWN: The decision to sell a piece of Penang government land to a hospital was made with the consent of the state executive council, Chief Minister Lim Guan Eng said today.

Lim was responding to Gerakan’s claims that it was a “one-man show” decision to sell the Peel Avenue land to a private hospital for RM156 million.

“All deals related to the hospital were done with the agreement of the state executive council.

“Can Gerakan show proof that I, the chief minister, decided the sale on my own?

“I challenge that person to show proof, or else he is a liar,” he said at a press conference in Komtar today.

Lim also explained why the Peel Avenue land was parked under Chief Minister Incorporated (CMI), a company wholly-owned by the Penang government.

Gerakan had queried why the Peel Avenue land was parked under CMI, rather than regular government agencies like Penang Development Corporation or others.

Lim said if the land was sold by the state government, it could only give the buyer an option of a Temporary Occupation Licence (TOL) or pay one lump sum for the land.

Lim said in the case of the Island Hospital purchase of the Peel Avenue land, TOL or full payment for the land might not be feasible for the investors.

He said since the buyers did not know whether they would get a health ministry licence to operate, they would be in jeopardy if they paid the money in full for the land.

Lim said the land was hence alienated and parked under the CMI, where it acted as a regular company, rather than a government body.

He said all CMI’s internal decisions are made by the state executive council.

“It is a holding company used when dealing with private companies. The state government cannot do this kind of contracts.”

He said those unhappy with the price of the land sold can complain to the finance minister as the land was sold at higher than the government valuation price.

The deal has come under the spotlight of the Penang opposition after it was sold through direct negotiations instead of open tender, as is usually done by the state government.

Lim defended the sale, saying it would bring RM2-RM7 billion in economic value to the state, creating 2,000 jobs and wooing medical talent from overseas.

The land was sold to Island Hospital Sdn Bhd on a 99-year-lease last December. The hospital intends to build a 600-bed private hospital and suites in the next five years if it obtains a medical licence from the health ministry in the next two years.

The hospital has placed RM30 million as downpayment.

If it fails to obtain the ministry licence, it will forfeit 2% of the payment and the land will remain under Penang government’s ownership.

Lim had said the land was sold higher than the finance ministry’s valuation of RM148 million for a 99-year-lease. The Valuation Department had recommended that the land be sold at RM156 million if the buyer sought a freehold title.


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