1MDB must answer 3 main questions posed in the Edge Weekly’s expose of the RM1.38 billion purchase of 234 acres of land in Air Itam, Penang

1 Malaysia Development Bhd (1MDB) must answer 3 main questions posed in the Edge Weekly’s Expose(22-28 September 2014) of the RM1.38 billion purchase of 234 acres of freehold land in Air Itam, Penang. The land was were transacted in two deals on April 29, 2013 – just six days before the May 5, 2013 general election with a third and final deal on Sept 23 2013.

The 3 main questions were

  1. Why was the purchase price of RM 1.38 billion, 95% higher than what some of the land was valued at just two years earlier in December 2011 and what would be the benefit to 1MDB and finally the people of Malaysia that owns 1MDB?
  2. What happened to the 2013 general election promise by BN to build 9,999 units of public and affordable housing via 1MDB, comprising 6,666 low-cost flats of 700 sq ft each and 3,333 affordable homes of 1,000 sq ft each?
  3. Based on the acre-age of the land and the number of new homes that the federal government has promised to build, would 1MDB be facing a loss of over RM1.5 billion and who will ultimately bear the losses?

Even if 1MDB does not proceed with fulfilling BN’s promise to build 9,999 units of public and affordable housing, it will still incur financial losses. Assuming a financing cost of 4%, interest payment on the RM1.38 billion it spent on buying the land, works up to RM 55 million interest cost a year.

Can 1MDB give a full explanation not only because public funds are involved but because it affects the lives of the nearly 3,000 families residing on the 234 acres of freehold land for 50 years?

Penang Chief Minister
Media conference statement by Lim Guan Eng in Komtar, George Town on Wednesday, 24th September 2014