Penang state exco Phee Phoon Boh (below) has accused the previous BN government of squandering a possible RM80 million in savings, in the construction of the Seberang Perai Municipal Council (MPSP) headquarters.

penang scandal seberang prai municipal council 171108 phee boon poh Apparently a few years ago, the state’s executive council under then chief minister Dr Koh Tsu Koon ordered the RM80 million construction of the headquarters in Bandar Baru Perda, Bukit Mertajam.

This was despite an offer to build it for free by a developer on a 12ha plot of land in Ampang Jajar - with terms and conditions attached. The land was alienated to the local authority by the state government for a token sum of RM100,000.

The Pakatan Rakyat government would like to know why its predecessor - Gerakan led BN government - then ignored the offer.

"Why MPSP was instructed by the state exco to buy up Perda's land and construct its building for such an exorbitant sum when the council could have got it for free?"

"The onus on the previous BN government to publicly explain on its reasons behind its directive," State executive councillor Phee Phoon Boh told newsmen at a break during the Penang Assembly sitting today.

teng hock nan He recollected that Dr Teng Hock Nan- former exco in charge of local government affairs from 2000 through to 2008 - informed the state assembly in 2006 that MPSP chose not to build in Ampang Jajar because of its proximity to a waste dumpsite.

"Dr Teng even joked that the foul smell from the dumpsite would disrupt MPSP staff.

"If so why then a housing estate and a recreational park have now been built near the dumpsite?" asked Phee, who oversees health, welfare and caring society portfolios.

Bandar Perda is a RM3 billion privatised project undertaken by Umno-linked Aseania Development Sdn Bhd jointly with Penang Regional Development Authority (PERDA).

RM12 million for fresh flowers

Turning to other shortcomings in MPSP, Phee who was previously the state opposition leader, said that the local council was operating with a virtually empty accumulated funds, since their reserves have diminished from about RM225 million in 2000 to RM6.45 million this year.

The council has run on eight consecutive deficit budgets, which Phee feels it is down to non-competency in cost-cutting measures, increasing revenue and preventing lavish spendings.

The deficit size has also grown, from RM5.06 million in 2000, to RM19.54 in 2008.

The MPSP has had some success in increasing its income from RM108.187 million eight years ago to RM148 million this year. However in that same eight year span, expenditure has leapt from RM113.25 million to RM167.55 million.

Phee took Dr Teng - now Gerakan state chairperson - to task, saying he was just a ‘lame duck’ while the local council was losing its financial strength.

Yesterday, Dr Teng had asked for the state government to publicly reveal the findings of the private auditor they commissioned to study MPSP - and also for the sum paid by them for the service.

penang scandal seberang prai municipal council 171108 lim guan eng Chief Minister Lim Guan Eng in response today fired back and asked Dr Teng to explain first how RM225 million of MPSP accumulated funds managed to ‘disappear and become zero’ in eight years.

Lim stated that the could not just let past judgments go and focus on its own present administrations - as suggested by Dr Teng - since MPSP is hardly operable due to lacking funds.

Since the official state audited report fails to show MPSP’s expenditure details, Lim called on the former exco to help the present government to trace and recover the money lost.

"What say you, Dr Teng?" Lim asked at the same press conference.

The 2004 audit report alone - presented in the assembly in 2006- disclosed that MPSP that MPSP spent RM20 million on maintenance, RM12.19 million on fresh flower decorations, RM21 million on special services and RM6.3 million for constituency projects, described by Phee as "BN political projects".

Phee hinted that lavish and uncontrolled spending in the preceding years has now placed the local council in dire straits.

"I said in the assembly in 2006 that MPSP would go bankrupt if things go on this way.

"Now it has happened," Phee said.