PENANG, Sept 21 – Chief Minister Lim Guan Eng wants Putrajaya to explain if it is going ahead with its highly-publicised affordable housing project in Penang through sovereign wealth fund 1Malaysia Development Berhad (1MDB) which has been reportedly saddled with debts of RM38 billion. Lim said the federal government must come clean on 1MDB’s purchase of more than 234 acres (95ha) at a reported cost of RM1.38 billion around the Ayer Itam area before the general election last year for the stated purpose of building 9,999 units. Referring to a special report in The Edge Malaysia, Lim said it is uncertain how 1MDB can resolve its huge debts. “After this, we do not know how they will build the homes,” he said today.
“It is uncertain if they can pay the debt. “They are using public money for projects that we feel do not make sense at all,” he added. He also asked the government to clarify on the amount paid for the land. “I hope the federal government can address these issues because they are of public importance,” he said when officiating the completion of a repainting project on the 3-Point Flats in Seberang Jaya. Also present were state executive councillors Jagdeep Singh and Dr Afif Bahardin. The Penang Development Corporation is paying for 80% of the total cost of repainting and repairs costing RM287,000, while the rest is borne by Afif, who is the Seberang Jaya assemblyman.
In its cover story of this week’s edition, The Edge reported that 1MDB had paid far more for the purchase of largely undivided land on Penang island when compared with previous valuations. The report said that it appeared that building affordable homes on the land, reportedly the rationale of the purchase in the first place, would result in further potential losses of hundreds of millions of ringgit. During a general election campaign event in Penang on April 30 last year, Prime Minister Datuk Seri Najib Razak had announced that the Federal government, through 1MDB, had signed agreements to buy land to build 2,222 low-medium cost houses and 1,111 affordable houses each in Air Putih, Air Itam and Paya Terubong with a wide range of recreational facilities.
In addition, those living in the 962 one-bedroom homes in Kampung Melayu will be given new three-bedroom homes as part of the Air Itam affordable housing development, it was announced. On its website, 1MDB describes itself as “a strategic development company, wholly-owned by the Government of Malaysia.” Lim said that 1MBD, as a government entity, belonged to the people. He noted that former prime minister Tun Dr Mahathir Mohamad had also criticised 1MDB over its heavy debt and usage of funds. “I admit there are many issues I do not agree on with Dr Mahathir, but on this issue I do agree,” Lim said. “How can we allow 1MDB to owe RM38 billion? How will they pay it back?”