Last week, I had express shock that the Penang Chief Minister YAB Lim Guan Eng had denied that the total accumulated surplus of RM574 million for the DAP Penang state government since 2008 was due to the sale of state land. I had provided various figures to prove that it was and had asked him to teach me his special maths.

YAB Lim seems to have taken great offence at this and issued a press statement to attack me, saying that I do not understand accounts and gave various misleading figures to justify his attack.

His statement, which is littered with insults, appears to be the most personal of attacks since the start of YAB Lim’s political career. This proves that my statement have hit the nail on its head and has exposed his lies.

Despite the personal attacks, I am happy that YAB Lim had confirmed several points that I have been making which proves DAP’s much-repeated propaganda are outright lies.

The first point is that YAB Lim had confirmed that the Penang state operating spending had jumped three-fold since 2008 to 2015. This huge increases is set to continue as the operating spending under the Penang budget for 2017 is expected to be five times the spending in 2008.

YAB Lim said that I should praise him for still running a surplus despite a three-fold increase in spending. He said this is the result of the DAP Penang government’s CAT principles which had led to “cost containment achieved through open competitive tender that gives us the best pricing”.

However, I fail to understand what he meant as cost containment in the real world means that the operating spending will reduce instead of jumping 300 percent.

The second point is that YAB Lim finally admits that the often used “Penang BN sold more land got less than DAP” is misleading. YAB Lim agrees that much of this “land” that BN sold in their propaganda is actually land reclamation rights - and not real land.

However, YAB Lim went on to mislead again by saying that Penang BN had sold this reclamation rights for only RM1 psf as in the case of the Tanjung Tokong reclamation project..

He appears to have forgotten that this RM1 psf rights also comes with condition that once reclaimed, the developer has to hand-over 10 percent of the reclaimed land free of charge back to the state government.

This is the same land that the Penang government is using to pay for their controversial RM6.34 billion Penang Tunnel project and its highly priced RM305 million cost for reports.

This proves that the claim that Penang BN sold land or even land rights for RM1 psf is absolutely untrue as the land surrendered as part of our sales agreement is clearly much higher than that.

The media should ask YAB LIm if this is true.

The third point that YAB Lim made is that he has acknowledged that I am the new National Water Services Commission (Span) chairperson that started on Dec 1, 2016 although he has inexplicably blamed me for various water woes of the past before I started.

It is because of this current position of mine that I can confirm that the much used DAP propaganda of “Penang DAP has reduced the state debt by 95 percent because of CAT”.

What actually happened was that Span and the federal government had taken over the existing RM655 million state debt and converted it to a yearly lease of RM14.56 million that the Penang state government must pay to the federal government for 45 years, which comes back to the same amount.

‘Loan changed into a lease’

Therefore, instead of a loan it was changed into a lease. In return, the Penang state government pledged various state water asset and lands to the federal government.

In his statement last week, YAB Lim had claimed that the revenue that was used to pay for the three times increase in state spending came from quit rent and other land fees.

The Auditor-General’s Report clearly shows that quit rent revenues have remained static. It only grew from RM93 million in 2008 to RM104 million in 2015 - clearly insufficient to pay for the big jump in expenses.

What has shown and explosive growth was the item called ‘Premium Tanah - Pemberian Hak Milik’ which has jumped every year from RM19 million in 2008 to RM324 million in 2015.

The auditor-general had also explained that this item is revenue from land sales. Between 2008 to 2015, it totals RM1.22 billion - clearly higher than the RM574 million accumulated state surplus.

These figures do not include other assets sold by Penang PDC and land traded away such as the RM6.34 billion for the Penang Tunnel and the land to pay for the RM46 billion Penang Masterplan project where the Penang state government had also said they will borrow unspecified billions from the banks.

In a separate accounting item, the Penang government had also received payments for land sales from PDC of RM173.5 million between 2013 and 2015 - meaning total proceeds from sale of state land will now total about RM1.4 billion.

Our examination of the accounts also shows that between 2010 and 2014, the Penang government had closed down various state trustee accounts such as the ‘Akaun Perumahan Awam Kos Rendah’ and the ‘Pinjaman Projek Bekalan Air Luar Bandar’, and transferred the balance over to the state consolidated fund and recognised it as state revenues - which helps to deceptively boost the state surplus.

This amount of transfers total at least. RM240.19 million.

‘Land sales and accounting tricks’

Taking out the effects of state land sales and accounting tricks related to transfer of trustee accounts to recognise as state revenues, the Penang state government would have been in increasingly severe budget deficits every year since 2010.

Instead of an accumulated surplus of RM574 million from 2008 to 2015, it would have accumulated a deficit of RM1.057 billion.

A few months back, I had challenged YAB Lim and the Penang Institute to confirm 12 points on the declining state of Penang’s economy and finances or sue me if I had stated wrongly.

Among others, it includes the findings that Penang experienced the lowest growth in median salaries between 2010 to 2015, 4th lowest growth in median household income between 2009 to 2014 and that Penang had the fourth worse GDP per capita growth for the period 2008 to 2015 - with many other states having overtaken Penang.

Unfortunately, my challenge was met with silence from both YAB Lim and the Penang Institute, who issued a statement saying it refuses to answer me.

I had pointed out before that selling state assets to fund a soaring yearly administrative expenses is not sustainable and akin to selling the “family jewels” - a trend that is continuing with the recent sale of state shares in a Pulau Jerejak company for RM156 million and another tender to sell land arising from a cancelled sale to EcoWorld Bhd.

However, the Penang state government continues to rely on false propaganda to paint a false picture of its performance to mislead the Penang rakyat.

YAB Lim’s statement addressed to me last week is again, proof of this.

LIANG TECK MENG is secretary-general of Parti Gerakan Rakyat Malaysia.