Penang Chief Minister Lim Guan Eng today highlighted two recent High Court cases he said reveal the potentially huge compensation payout due to failures of the previous BN administration.

Lim claimed that the hundreds of millions of ringgit in payout was due to “criminal failures” of the Gerakan-led state government prior to 2008.

“The present Penang government lives in daily fear and nightmare of facing huge compensation payouts due to the failures of the previous BN administration that can bankrupt the state,” Lim told a press conference in Komtar today.

“When compensation was paid by the current state government, no one offered or raised a single sen to assist us, despite sweet promises made by some NGOs,” Lim added.

“The threat of bankruptcy is real and for this reason, the Penang government has unwillingly acceded to all previous rulings made by the previous BN administration to avoid huge compensation payout that can bankrupt Penang,” he said.

Lim was referring to criticisms he faced for acceding to previous BN rulings, especially on land reclamation projects and high-rise developments.

One of such cases he related at the press conference involved Majlis Perbandaran Seberang Perai (MPSP) in 1994. The council was subsequently sued by NEG Engineering Sdn Bhd for RM243 million.

Megamall complex case

The second case involves a land acquisition matter in 1992, known as the Bagan Serai Housing Estate Sdn Bhd case.

This case involves the present Megamall complex site in Prai, Seberang Perai.

“MPSP was fortunate to win the NEG Engineering Sdn Bhd case, which involved an active politician who was a leader in the previous government, but there is a possibility that they may appeal,” Lim said.

“Reports have also been filed by MPSP to the police and Malaysia Anti-Corruption Commission (MACC),” Lim added.

“Unfortunately the Penang government lost the second case, the Megamall case, and is appealing to the Court of Appeal. This involved potential compensation that could be similar to the sum in the NEG Engineering Sdn Bhd case.”

Lim said the Megamall case is similar to the state government losing in another land matter in Bukit Mertajam, as a result of an error by the previous state government.

The error, according to Lim, resulted in compensation of RM29.4 million to one Tang Hak Ju.

MPSP forced to pay RM20 million

Lim said the state government was forced to pay RM14.7 million and is still trying to reclaim back the sum in the courts.

He also recalled that MPSP was forced to pay RM20 million as compensation to Boustead Holdings Bhd for reducing the height of its hotel from the 12 storeys approved by the previous government to five storeys.

“Another potential threat is compensation claims by landowners with plots above 76 metres, whose developments were approved as special projects by the previous state government, which may run up to billions of ringgit,” Lim said.

He went on to welcome Universiti Malaya law professor Gurdial Singh Nijar and Human Rights Society (Hakam) president Ambiga Sreenevasan, who would be assisting MPSP to avoid paying huge compensations.

The duo would be helping in the case, where the council rejected development for land above 76 metres (250 feet) or special projects that were approved by the previous government.

“I am pleased to announce that we are getting high-powered legal expertise in both Gurdial and Ambiga,” Lim said.