Penang Chief Minister Lim Guan Eng has decided to sue the company managing Pulau Jerejak resort, taking up a challenge recently hurled at him by Barisan Nasional leaders.

Lim announced yesterday that the state government would be initiating legal action against Tropical Island Resort (TIR) for failing to pay for land premium amounting to RM10.6 million.

azlan Lim said the state executive council meeting held in Komtar yesterday had  decided on the matter, as the company had only paid RM2.4 million of the land premium.

However, the company had obtained the land title even though it failed to settle the full amount of the premium, he added.

The 80-acre land has been leased for 60 years, at a rate of four percent a year to be paid within 10 years.

“They dare us (to sue), we will not be challenged, especially when it involves the interests of the people,” Lim vowed.

“Since we are asked to, we will sue TIR to get back our money, or the land,” he added.

TIR is a joint venture between state agency Penang Development Centre (49 percent) and federal government development outfit UDA Holdings (51 percent).

State Gerakan chief Teng Hock Nan recently challenged Lim to sue, since Lim had been blaming the coalition for badly managing the resort, resulting in a RM30 million deficit.

Lim, who is DAP secretary-general, said former chief minister Dr Koh Tsu Koon was “irresponsible” for blaming the state government over Jerejak as he himself had previously approved of the management by UDA from 1992 to 2007.

He also slammed BN for challenging the state to continue investing in the island.

He said if the state decided to do as BN had suggested, it would suffer a bigger financial loss.

‘Project incurred a RM30 million loss’

Despite handing over all usable land of commercial value to federal government development agency UDA Holdings, the project incurred a RM30 million loss, he reiterated.

“We cannot even get back our investment cost. Our priority now is to get back the land or money... we are asking our legal adviser to look into the matter,” Lim said.

On the BN leaders' claims that the losses were merely diminishing returns, Lim slammed them for “playing with words”.

“It is actually a loss, but they say diminishing value; just like the hike in petrol prices, they say it is merely an adjustment, but the effect is the price has actually gone up,” he said.

“And the implication is actual loss; we are not like BN, good at playing with words, we speak clearly but they like to twist and turn,” he added.

Lim also defended the state government campaign in distributing 150,000 flyers to explain the issue.

He questioned if there was any wrongdoing involved in circulating the pamphlets to members of the public.

“What is wrong with it... even this they cannot understand; it is so easy to understand... they simply do not want to understand,” he said.

Teng congratulates Lim

In an immediate response, Teng, who is state BN working committee chairperson, congratulated Lim for adhering to his advice on the island’s investment issue.

NONE Teng ( right ) said he was glad that Lim and the state government had taken the right approach.

Distributing massive amount of leaflets and openly asking the previous BN administration and former chief minister Koh to pay up for the alleged RM30 million deficit were “all futile politicking solely aimed at tarnishing the BN’s image”, he added.

“Lim should have taken the right recourse, instead of finding fault and going after the wrong target which he has done it many times before,” said Teng in a statement.

“We will continue to play a constructive role to monitor the performance of the state government, without fear or favour,” he added.