Chief Minister Lim Guan Eng's allegation that the previous state government had sold a plot of prime land for RM1 per square feet (psf) to a private developer is "mischievous, misleading and untrue", said the Penang BN.

State Gerakan Local Government bureau chief Teh Leong Meng said the RM1 per square feet premium for the 940 acres of land in Tanjung Tokong is not the sales price.

The amount was shown in Article 6 of the contract signed between the state and developer Tanjung Pinang Development Sdn Bhd on Oct 7, 1999.

NONE "There was no land (at the time) and the government could not sell the sea! How to sell the land if there wasn't any land?" questioned Teh ( left ) at a press conference today.

"The RM1 psf is for the right to reclaim the land," he added.

The former Penang Municipal Councillor was referring to Lim's expose on Saturday that the previous Gerakan-led government had entered into a contract with a private company to dispose of said land for RM1 psf.

Lim produced the document - read out by his legal officer Andrew Yong - following BN's criticisms over the state's RM6.3 billion integrated road project announced by Lim last month.

As payment for the deal, the state government is exchanging 110 acres of land with Consortium Zenith BUCG Sdn Bhd, the company which won the tender to develop the road project involving an undersea tunnel linking the island to the mainland.

As for the 1999 deal with the previous BN government, Teh claimed that the developer had to reclaim the land (by doing earth filling) and bear all the costs of land reclamation.

Apart for that, the previous government had requested the developer to build low cost (LC) flats and low-medium cost (LMC) apartments for the poor on the land, he added.

Moreover, the developer had to bear the burden of the land reclamation cost, premium for land alienation and conversion, and the construction cost of the homes (LC and LMC), he stressed.

Undersea tunnel, road project unnecessary

Teh said Article 6.2 of the agreement mentions that the state was entitled to a maximum 10 percent (94 acres) of the nett saleable land (940 acres).

"We ask the Penang government not to issue irresponsible and baseless comments to mislead the public," he added.

"The real issue is that, at this juncture, it is not necessary to build the undersea tunnel and the three roads," Teh noted.

lim guan eng Teh then returns the question to Lim ( left ), asking him why he is giving away 110 acres of land for free to the Consortium.

He claimed that the company will be making a profit from the undersea tunnel since it would be collecting toll for tenure of 30 years - which according to his "most conservative calculations" - amounts to about RM6.7 billion.

This calculation is based on the assumption that 21.9 million vehicles per year (or roughly 60,000 a day) at RM10 toll charges per car for 30 years for the undersea tunnel, which is slated for completion in 2025.

"Use the 110 acres to build affordable housing for the poor on the island. Many from the middle class and the poor cannot afford to own a flat or apartment because they have become very expensive in the last five years."

When asked, Lim quickly shot back, "It is a complete lie to say they did not sell RM1 psf for the land. Premium is sale".

"Our Bayan Mutiara land reclamation project is also similar, but we sold it for RM240 psf," he added.

"The issue of LC and LMC is standard for every development, there is no other payment there," he stressed.

On the current government giving away free land to the Consortium when it would be profiting from toll collection, Lim asked BN not to "pluck figures out of nowhere".