THE Penang government will only allow shipbuilding activities on three lots of land on Pulau Jerejak, which a private owner wants to develop.

The landowner, the federal government-linked Boustead, is seeking bids from interested parties to develop the 10.7ha area for private, commercial or recreational use.

Chief Minister Lim Guan Eng said the state will not entertain any requests to change the use of the land.

He said no other development, except for shipbuilding, would be allowed there.

“I would like to remind interested bidders that this will not change. The site will remain a shipyard.

“If they say they want to build warships there, we can consider,” he told reporters at Komtar today.

Lim was referring to news that Malaysia and China had inked a deal for four littoral mission ships (LMS).

Last November, the two countries inked their first major defense deal when Prime Minister Najib Razak visited China. He agreed to buy four LMS.

Malaysia’s Boustead Naval Shipyard Sdn Bhd is reportedly partnering with China Shipbuilding and Offshore International Co (CSOC) in the joint-venture to build the LMS – two in China and two in Malaysia – for the Royal Malaysian Navy.

“There’s no word on where they will build the warships. They can build them in Penang,” Lim said.

Lim said the state government had no prior knowledge of the matter until an advertisement announcing the sale by EOI (expression of interest) was printed in a Chinese vernacular newspaper recently.

The advertisement showed that real estate firm CH Williams Talhar and Wong had been appointed to market the property.

There was no communication at all with the state government about the plan to develop the site, he said.

The three plots of land on the east-central coast of the island next to the first Penang Bridge were leased to the company when Penang was under the Barisan Nasional government.

Two plots were leased for 99 years until January 2072 while the other was leased for 60 years until November 2073. The leasehold for the three plots have about another 55 years.

Lim said the state government had no funds to acquire the land to stop any unwanted development.

“It is not just paying the value of the land, but also the estimated future profits from the project. We can’t afford it.” – June 5, 2017.