A Gerakan leader has questioned if the state government is aware that the proposed 40-storey luxury hotel to be built on prime state land is up for sale.

The project on Peel Avenue courted controversy when the 2.6ha plot of state-owned land was sold without an open tender to the Island Hospital Group for a medical expansion project early this year.

The land is being leased to Island Hospital for 99 years for a sum of RM156 million.

Penang Gerakan acting youth chief Jason Loo said that state government leaders should not keep Penangites "in the dark over such an important decision.”

“It looks like the hotel deal is the priority and not the hospital,” Loo claimed at a press conference on Peel Avenue.

"We thought that the private hospital is a big investor, so why does it need to sell the hotel component?" he asked.

Loo also claimed that he was denied the sales and purchase agreement of the deal when he tried to apply for a copy two months ago via the Freedom of Information Enactment 2010 (FOI).

Brochure shows hotel is on sale

Loo showed reporters a brochure stating that Island Hospital is looking for an investor to purchase the hotel component of the project on Peel Avenue.

He said the buyer would own a 95 percent share in the hotel, while Island Hospital will retain the remaining five percent.

The state government should live up to their stated principles of competency, accountability and transparency (CAT), he claimed, and answer questions about the sale of the hotel.

“It seems that the DAP state government is shying away from the CAT principles recently," Loo said.

In May, Chief Minister Lim Guan Eng justified the sale of land without an open tender, saying the state “feels that this is an offer from a reputable hospital and not many companies can afford to invest RM2 billion.”

Lim also said the deal can be likened to foreign direct investment, which is why an open tender was not necessary.

Private sale not state’s business

Penang Island City Council (MBPP) mayor Maimunah Sharif said the council has received a planning permission application from the hospital.

She added that objections from residents from the areas surrounding the hospital have also been received, but that this was “normal procedure.”

“We have already heard some objections and are processing the matter. However, we don’t have any information that the proposed hotel is up for sale,” she said at a press conference.

On the alleged claim that the hospital was seeking a buyer for the proposed hotel, state exco in charge of local government Chow Kon Yeow said “We are not involved in any private deals.”

“Even if it involves an apartment, we do not know who they sell their units to. We are also not involved in the business of planning permissions for the building,” he added.