Lim wants state govt to explain Penang's billion-ringgit financial plunge

Summary

• Lim urges Penang govt to explain why its consolidated revenue account of RM1.15b in 2019 declined by nearly RM1.1b at the end of 2024.

• Ex-CM wants to know how the state govt ended up owing RM300m to PDC.

• Lim also questions the need to pay a six-month bonus to PDC service members, when there are unsolved issues.

Former Penang chief minister Lim Guan Eng has demanded an answer from his successor, Chow Kon Yeow, on the state's shrinking coffers, lamenting that Penang's financial standing has become "so critical".

In his speech in the Penang state legislative assembly today, Lim urged the state government to explain why its consolidated revenue account of RM1.15 billion in 2019 declined by nearly RM1.1 billion over five years.

"The chief minister had acknowledged that the government would have a remaining balance of RM50 million at the end of 2024. The revenue surplus stands at RM65 million as of March 31, 2025, which subsequently decreased to RM43 million on May 2.

"This means a financial deficit due to excessive spending of revenue, consecutively decreasing for five years by nearly RM1.1 billion.

“Can detailed figures be provided on how this money was spent?" he said during the vote of thanks for the official opening address of the 15th state assembly's third term.

The Bagan MP said that as the state government faces financial constraints, private sector involvement through partnerships is essential to continue generating development.

"Indeed, the federal government assistance in 2024 in the form of an advance payment of RM100 million to cover cash flow and projects worth billions of ringgit, such as the LRT, expansion of the Penang International Airport, and the Sungai Dua-Juru elevated highway, have become the state's main support," he added.

While the state government's efforts to increase state revenue and reduce expenditure are welcomed, Lim (above, left) said it should not affect any financial assistance received by the people or increase their financial burdens.

iSejahtera under review

The New Straits Times previously reported that Chow said the Penang government is mulling a review of its welfare programmes, especially iSejahtera.

He said this is due to rising costs and the need to effectively target aid recipients.

Chow explained that the iSejahtera programme would need strong financial backing to continue as it demands significant expenditure.

MCA had then questioned Chow if the state government is facing a financial crisis, describing the move on iSejahtera as a blow to senior citizens who are already struggling with the rising cost of living.

Debt owed to PDC

Lim said one financial constraint issue is the state government's debt to the Penang Development Corporation (PDC), which exceeds RM300 million.

“The chief minister had previously answered that as of 2023, the state government did not owe PDC any money. Suddenly, in less than two years, there's a debt of hundreds of millions of ringgit?

“Why was inaccurate information provided to the state legislative assembly?

"Here, I would like to ask whether PDC has set the re-tender price for 226ha (559 acres) of land at Byram/Changkat Estate at a price lower than the first tender. When the land was sold through ‘direct negotiation’ to UMECH Construction Sdn Bhd, it was at a price of RM646 million," he added.

Lim pointed out that after the controversial land deal faced public backlash, including being labelled as 2024's "Turkey of the Year" transaction by The Edge Malaysia, authorities cancelled the direct negotiation and switched to an open tender process.

According to him, this resulted in a highest bid of RM818 million from an IJM Properties-led consortium.

"This open tender offer price of RM818 million is RM172 million or 27 percent higher than the direct negotiation price of RM646 million. This revenue of RM818 million is much needed in the financial constraints of the state government.

"For reasons that remain unclear, this tender offer was rejected and cancelled, and re-tendered.

“It is understood that the re-tender price requested is lower than this RM818 million. Has this occurred, and can there be certainty that the sale price under this re-tender will exceed this RM818 million?" Lim questioned.

6-month bonus to PDC members

Lim also questioned the need to pay a six-month bonus to PDC service members when there are unsolved issues.

He pointed to a road widening project from Jalan Perusahaan to Jalan Tok Kangar in Seberang Perai Tengah, valued at RM21.6 million, saying that the project, which began on Aug 1, 2019, was supposed to be completed by July 31, 2021.

"Unfortunately, it is delayed and expected to be completed only by the end of 2026. What actions have been taken to ensure this does not recur or persist further, what are the additional costs, and what actions are being taken against the contractor to obtain compensation and against the PDC officers responsible?

"While such controversies are occurring, there arose the issue of a six-month bonus payment to PDC service members, the highest among all government agencies.

“Who received this six-month bonus payment? And does this reflect fair treatment for an agency involved in the controversies I have described above?" Lim said.

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