THE Penang government today denied it relied on selling land to generate income to cover its growing operating expenses.

Chief Minister Lim Guan Eng said certain quarters were slandering the Pakatan Harapan state government by claiming so.

“Land sales are not Penang’s main source of revenue and not the reason why Penang records surpluses annually.

“The Auditor-General’s Report 2016 announced Penang has an accumulated surplus of RM677 million since 2008. But only RM439 million came from land sales,” he told a press conference today.

From 2012 to last year, Lim said the state made RM939.3 million from land sales; and RM500 million from the amount was given to state investment arm Penang Development Corporation to build affordable homes.

The rest, he said, was kept in case the funds would be needed for more affordable housing projects in the future.

Lim was responding to remarks by Barisan Nasional critics the Penang government had been selling state land to the private sector for revenue.

Penang Umno chief Zainal Abidin Osman today said the AG’s Report 2016 had confirmed the state generated revenue by selling land to the private sector to cover its operation expenses that had gone up 500% since 2008.

He said Penang collected RM1.55 million in land premium between 2012 and 2016, and RM768.46 million in quit rent and land conversion premiums.

The Umno leader, who also chairs the Penang Federal Action Council, said Penang recorded revenue related to land matters at RM491.87 million in 2016, RM518.51 million in 2015, RM464.83 million in 2014, RM463.27 million in 2013 and RM383.56 million in 2012.

“We wonder why the chief minister refuses to accept this fact, despite the AG’s Report confirming Penang sold land was true and accurate.

“We are confident the land sales are bigger than these numbers because the state offers instalment schemes to land buyers,” he said, citing the Bayan Mutiara land sale in 2011 for RM1.1 billion where the buyer was offered a 60-month or five-year instalment plan.

Lim said land premiums did not necessarily come from land sales alone, as they were also paid for land use conversions and lease extensions to 99 years.

He also slammed BN for using the land sale issue against the PH administration, which sold land 36 times less than the former administration under BN.

From the early 1990s to 2008, the BN government sold 1,481.5ha of state land for RM1.05 billion; but the PH government sold only 42.9ha for RM1.11 billion since taking over in 2008, he said.

Lim also defended the state’s decision to sell land to certain investors, like the sale of a Lebuhraya Peel land to the Island Hospital for RM156 million.

The sale was for an “economic game-changing” investment of RM2 billion to build the largest private hospital in Malaysia with 1,000 beds, which would in turn create 2,000 high-value jobs, retain talents and bring back local doctors, nurses and specialists who had gone overseas, and help Penang become a medical city.

Another game changer was the anticipated Ikea project in Batu Kawan.

Lim also said expenses made by the state government had “value for money” and high impact.

The rise in state spending from 2008 to last year in the range of 5% to 10% annually was due to increases in state government staffing, salaries and other costs to manage 20 state departments, he said.

Another reason was the increase in allocations for the state’s many social and wellbeing programmes like aid for schools, students, school bus and taxi drivers, senior citizens, fishermen, religious teachers, trishaw paddlers and other groups eligible for welfare aid.

Lim said funds also went to the state’s agencies like the local councils, Penang Water Supply Corporation, PDC and others for various projects and to cover costs.

In 2009, RM40 million was transferred, RM89 million in 2010, RM150 million in 2011, RM70 million in 2012, RM200 million in 2013, RM120 million each in 2014 and 2015, and RM245 million last year. – December 1, 2017.