Instead of letting a few construction companies such as UEM World and Malaysian Resources Corporation Bhd (MRCB) benefit under the Northern Corridor Economic Region (NCER), the Penang government should form a stakeholder company to allow 1.5 million Penangnites to share in the profits

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Press Conference

by Lim Guan Eng

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(Penang, Sunday): Penang Chief Minister Tan Sri Dr Koh Tsu Koon has behave irresponsibly by merely denying that Penang has been marginalized by the NCER without stating how much of the proposed  RM 177 billion in investments over 19 years will be earmarked for Penang. Prime Minister Datuk Seri Abdullah Ahmad Badawi has said that two-thirds of the RM 177 billion in investments would come from the private sector and the Government would invest RM 5 billion to implement programmes in the initial stages.  

The question is how much of this RM 177 billion in investment is earmarked for Penang and the other states. Compared with Johor’s Iskandar Development Region (IDR) which targets RM 50 billion over the first five years and RM 383 billion target over 20 years, the NCER and Penang has clearly lost out in the race for foreign investment. In contrast to Johor alone getting RM 50 billion over 5 years and RM 383 billion over 20 years, the RM 177 billion is to be divided over four states of Kedah, Perlis, Perak and Penang. 

Most of the projects announced in the NCER, such as the RM 18 billion Penang City Centre project, are driven by the property sector, prompting many financial analysts to write off NCER for Penang as nothing new. This is what financial research house, JP Morgan has to say,

As opposed to the Iskandar Development Region’s (IDR) focus on construction, property and logistics development, the NCER’s exposure to the construction sector is limited to infrastructure upgrades in the state of Penang. Given that all the signature infrastructure projects within the NCER were expected, we consider the plan as “nothing new”.

The biggest project is a RM2 billion central transportation hub called Penang Sentral to enhance Penang’s role as the logistics hub for the NCER, was awarded to MRCB. Two other key projects with a total value of as much as RM2.7 billion such as  the RM1.6 billion Penang monorail and the RM1.1-billion Penang Outer Ring Road (PORR) are likely to be awarded to MRCB.  With the RM 2.7 billion Second Penang Bridge totally financed by China, already awarded to UEM World, all big projects are given to cronies of UMNO.  

Why should only these crony companies of UMNO benefit from the huge profits of these projects? Instead of letting a few construction companies such as UEM World and MRCB benefit under the NCER, the Penang government should form a stakeholder company to allow 1.5 million Penangnites to share in the profits. Such a stakeholder company belonging to all Penangnites would allow all profits to be channeled so that they can be used for the welfare and benefit of the common good. 

Under the NCER, the cost of living and property prices are going to escalate. It would be impossible for a young family to purchase a house on Penang island, with the RM 18 billion Penang City Centre catering for the wealthy. Where would the lower-income groups on Penang Island be under the NCER? Unless they are given a stake in the stakeholder company, they will have no place, be marginalized and driven off the island. 

Penang Chief Minister Tan Sri Dr Koh Tsu Koon should fully explain how Penang is going to benefit in ringgit and cents and not distract attention with obscure speeches. If the Federal Government is going to give RM 59 billion out of the RM 177 billion in development funds, how much will be allocated to Penang? Better still he should be prepared to engage in a public debate on the economic performance and potential of Penang on how to regain its position as the most developed state in Malaysia. 

How much Penang loses out can be seen by the Johor a total of RM 2,489 million comprising domestic investment of RM 879 million and foreign investment of RM 1,610 million in the manufacturing sector for the first three months of 2007. Penang pales in comparison with only RM 178 million comprising RM 81 million in domestic investment and RM 97 million in foreign investment. The difference in investor interest and importance between IDR and NCER or between Johor and Penang can be seen by the difference of investment between RM 2,489 million and RM 178 million!   

Sime Darby is too busy involved in creating the largest listed palm oil firm in the world. The RM 30 billion merger between GLCs, Sime Darby, Golden Hope Plantations and Kumpulan Guthrie into Synergy Drive Bhd will see it being listed in November as the second-largest company on Bursa Malaysia with a market capitalisation of about RM48.5 billion.  Upon completion of the merger, Synergy Drive is expected to have a combined workforce of about 107,000 people. Will Sime Darby be focused on the NCER when they are busy combining the three large firms and 5 smaller firms into one productive entity?