The Penang government has been accused of selling out the rights of its people to revenue and development by allowing private companies to reclaim and sell coastal land.

According to the opposition, the privatisation of the land rights is a loss of revenue to the state development coffer.

"This is a massive monetary loss for the people of Penang," state DAP secretary Danny Law Heng Kiang told malaysiakini .

For the past few years, the Penang government has bestowed the rights for free to various private companies to reclaim the coastal land and sell it to other private companies for development.

"It's usurpation of the people rights. The state government has robbed from the people and helped private companies to gain from reclamation," said Law.

"The state government should have gained from the project. The revenue could have been used to benefit the people," he added.

Why give it away?

The opposition leader pointed out that the state government has reclaimed and develop coastal land on its own previously.

"Why should it give away its rights to land reclamation to private companies, which in turn monopolise the monetary gain?" he asked, while claiming that these companies had political connections

Tanjung Pinang Development, an Umno-linked company, has reclaimed 392ha in the Tanjung Tokong coastal area. The area would be turned into a new township over the next few years.

A 13.2ha plot of reclaimed land was given for free to IJM Bhd to develop a new residential-commercial hub, which will house condominiums and a Tesco hypermarket, in Jalan Udini, about 500m from the Penang Bridge.

The proposed Penang Outer Ring Road (Porr) concessionaire, Peninsular Metroworks Sdn Bhd, has been bestowed the rights to reclaim 100ha sea land along the Gurney Drive coastline.

Besides reclaimed land, an existing Penang Development Corporation-owned 300ha land in Batu Kawan was gifted to Abad Naluri Sdn Bhd, another Umno-based company.

Abad Naluri has already sold half of the land to the Penang Turf Club for horse training and racing development.

The state government is estimated to have only 80ha of land on the island and 2,000ha on the mainland for development purposes.

Since Penang faces severe land scarcity, Law said the state government should make use of the reclaimed land to develop new townships, especially to cater for the housing needs of the middle and lower income groups.

At present most development projects on reclaimed land target the higher income group.

Dead end

The state government under Chief Minister Dr Koh Tsu Koon has been accused of being "scared" to demand for federal funds to develop existing land besides the reclaimed plots.

Law said new mixed townships comprising industrial, commercial and residential areas, would boost the state's flagging economy, which had been badly hit by declining foreign direct investments (FDIs), tourist dollars and brain drain.

According to statistics released by the Ministry of International Trade and Industry, Penang had fallen from pole position in state stakes for FDIs in 1999 to fourth behind Selangor, Sarawak and Johor in 2006.

The state is expected to fall further behind Kedah and even Melaka in 2007. Since 2000, most FDIs in Penang have been reinvestment by existing companies, such as Intel.

Due to lack of career opportunities, many highly educated and skilled locals, especially youths, have moved out of the state.

"This is a huge loss to the state. Penang under the Gerakan government has reached a dead end," said Law.