Prime Minister Najib Razak should ensure that federal development agencies focus on building low- and low-medium cost houses and stick to guidelines that the units should not cost more than RM400,000 or make a huge profits from these projects.

"Failure to do so will expose Najib as insincere, that the federal government is hypocritical by not practising what it preaches by profiting from the so-called public and affordable housing," Penang Chief Minister Lim Guan Eng said today.

Lim said agencies such as Lembaga Kemajuan Wilayah Pulau Pinang (Perda) and JKP Sdn Bhd should take the lead and not profit from building low-cost and affordable housing projects.

Both Perda and JKP, he said, expect to profit RM150 million from 15 projects in Penang.

Lim said this in reference to Najib’s call to all states to ensure that low-cost housing was made available to those who needed it and to not see it as a profitable business venture.

Najib made his call for low-cost housing when opening Wisma Rrehda (Real Estate and Housing Developers' Association Malaysia) yesterday.

"The Penang government agrees with Najib that it is wrong, irresponsible and against public interest for government agencies to profit from building such houses," Lim said in a statement.

"Unfortunately, federal agencies such as Perda and JKP Sdn Bhd intend to profit hugely, with an estimated profit of RM32 million by JKP Sdn Bhd from eight projects and RM117 million by Perda from seven projects throughout Penang," Lim said.

"How can federal agencies like Perda be helping the poor, or even the bumiputera, by building luxury houses for sale at a price of RM1.85 million in Teluk Kumbar, in the southwest district?" he asked.

'Shocking fact revealed by state Umno'

Lim said this "shocking fact" was revealed in a letter to his office dated Sept 30 by Penang Umno liaison chief and Penang Federal Action Council chairperson Zainal Abidin Osman.

Unlike both JKP and Perda, he said, the Penang government would be losing RM500 million to RM800 million from building public and affordable housing.

This was because the Penang government observed the federal guidelines on pricing low-cost public housing at below RM72,500, while affordable housing should be between RM72,500 and RM400,000 on Penang Island and between RM72,500 and RM 250,000 on mainland Seberang Perai.

"No house built by the Penang government is sold at more than RM400,000, and this is much less the RM1.85 million houses sold by Perda," Lim added.

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