The Penang government has no qualms about approving low- or low-medium cost housing projects by federal government agencies, says Chief Minister Lim Guan Eng.

However, the state government needs to be cautious about projects by Perda and JKP Sdn Bhd that  involve luxury houses, Lim added.

Lim said he hoped Deputy Prime Minister Muhyiddin Yassin could understand the pressure faced by the state government if it approved for luxury houses to be built on land acquired from the people.

"The situation  will be more complicated if there are squatter problems involved," Lim said in a letter to Muhyiddin, dated Oct 23, copies of which were provided to the media today.

Lim was referring to Federal Action Council chairperson Zainal Abidin Osman, who claimed that the Penang government did not approve housing projects by federal agencies  Lembaga Kemajuan Wilayah Pulau Pinang (Perda) and JKP Sdn Bhd, federal agencies.

Lim said based on a series of correspondence between Zainal Abidin and the state executive councillor in charge of housing, Jagdeep Singh Deo, not all units proposed by the two federal agencies are affordable homes.

"We found that there are units built by Perda and JKP Sdn Bhd that are luxury houses, which cost more than the price of affordable homes built by the Penang Development Corporation (PDC)," Lim said.

"The cost of affordable houses on the island are RM400,000 and RM250,000 on the mainland and this policy practised in Penang complies with the guidelines set by the federal government," he added.

"Those that Perda and JKP Sdn Bhd plan to built cost RM575,000 on the mainland and RM1.85 million on the island," Lim pointed out.

Lim said 15 out of 11 projects by Perda and JKP Sdn Bhd are on land acquired for public use and these are not plots acquired from private owners.

The cost of acquiring land to build public housing and affordable houses is lower, he said. The purpose of acquiring such land should not be changed to the building of luxury units.

"There also other problems involving Perda and JKP Sdn Bhd projects and these include the relocation of squatters from the land, which must be resolved before the state government gives the approval to commence work on the land," Lim added.

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