The state government should have retained the land in Bayan Mutiara, Penang, because it could be better used for other purposes, the government did not need the extra cash to build low-cost housing, and the developer who bought it is too financially weak to develop the prime land, argued Kota Belud MP Abdul Rahman Dahlan.

He said this during a debate last night against Petaling Jaya Utara MP Tony Pua at UCSI University, which was attended by about 200 people and streamed live on the Internet. The duo are also members of the parliament’s Public Accounts Committee.

NONE To support his arguments, Abdul Rahman ( left in photo, with Pua ) pointed that that it was one of the few tracts of state- owned land on the island, and it could be used as a park or sold in smaller parcels at a higher price.

He said the nearby 40 acre land around Queensbay Mall was sold at RM420 per square feet, compared to Bayan Mutiara’s 103 acres sold at RM240 per square feet.

Abdul Rahman also said that the developer, Ivory Properties Bhd, only have shareholder funds of RM200 million and had already defaulted on payment twice.

In addition, he quoted Penang Chief Minister Lim Guan Eng as saying that the state-owned Penang Development Corporation (PDC) has the RM500 million needed for a low-cost housing project, to which some proceeds from the sale would be channelled.

However, Pua dismissed these issues as merely policy issues on how to reap maximum returns from the land for the people, but did not prove any “hanky-panky”.

The sale of the 103-acre land on Penang Island just south of the Penang Bridge had been the subject of controversy following allegations by Umno leaders, including Abdul Rahman, that there was no open tender, and the land could have been sold for an even higher price.

“Immediately after advertising it (the request for proposals), the whole deal was very opaque. Nobody knew what was going on. There was no public disclosure of what went on, especially on the basis of choosing Ivory Properties,” he said during the debate.

The land was sold by PDC last year for RM1.07 billion over five years, and part of the proceeds would go to the construction of 12,000 affordable houses in Batu Kawan on the mainland, priced between RM72,000 to RM220,000.

‘All the characteristics of an open tender’

Pua said although the tender documents title said that it was a “request for proposal”, it had all the characteristics of an open tender.

“To try to be pedantic over the definition of a proposal versus a tender in its word form rather than its substantive form is not the way to go,” he said.

Pua added that the Bayan Mutiara land, being larger, would mean that the developer is obliged to also build infrastructure such as places of worships and hospitals, hence justifying the lower price compared to Queensbay Mall, which did not have to build such facilities.

On concerns over Ivory Property’s finances, Pua said the company was given two extensions to hold an extraordinary general meeting with shareholders to approve the purchase, and would pay up in a few days.

In addition, he said this is subject to an eight percent penalty, and it risks forfeiting its RM22 million deposit if it defaults.

Pua also said that the state government does need the money in order to fund additional welfare projects, as it only had an annual budget of RM400 million when Pakatan Rakyat took over in 2008, compared to the land’s billion-ringgit sale.