Concession rights now worth RM5bil, says Chow

Property News/ 7 November 2011 Leave a comment

GEORGE TOWN: The concession rights obtained by the developer of the RM300mil Tun Dr Lim Chong Eu Expressway are now worth RM5bil, said Penang Local Government and Traffic Management Committee chairman Chow Kon Yeow.

“Former Chief Minister Tan Sri Dr Koh Tsu Koon’s outburst had not been able to dispel that fact as industry players had estimated the gross development value was over RM5bil because The Light project area was worth RM500 to RM600 per sq ft.

“Dr Koh had given the developer concession rights, including rights to reclaim land, cash payment for land acquisition and squatters relocation, and waiver to development charges, that are now worth RM5bil or more,” he said in a press statement yesterday.

In yesterday’s report, Dr Koh, also Gerakan president, had lashed out at Chow over claims that the previous Barisan Nasional administration had a “scandalous” agreement with a developer over the expressway.

“Chow’s allegations that the developer of the expressway could get up to RM5bil in development value was misleading and ridiculous.

“The development value of the project should be taken at the 1997 price, not the current price,” he had said.

Koh had estimated the development value for the expressway, previously known as the Jelutong Expressway, at 1997 to be RM656.5mil.

Chow said the state secretariat only used the “old” rate of RM90 for freehold and RM74 for leasehold to calculate the value of the reclaimed land as if they had used the current value, it would have added a few billion ringgit.

Dr Koh’s argument, he added, that the state should not use the current value to evaluate the 1997 concession agreement showed that he (Dr Koh) had ignored the importance of development value on the reclaimed land as a major source of revenue for the developer.

“To date, the developer had only spent RM242mil on the yet-to-be completed expressway but had already enjoyed the profits from the multi-billion ringgit property development.

“Our records also showed that the previous administration had given an advance of RM33.18mil to help the developer pay for land acquisition and squatter compensation. This proves that the Gerakan’s assertion that they never paid money to the developer was false,” he said.

SOURCE: The Star

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