Press Statement by Lim Guan Eng in Georgetown, Penang on Wednesday, 15th October 2008: 

The new Penang state government has no plans to follow the previous BN state government's policy of circumventing the National Land Code (NLC) by converting all reclaimed land from leasehold to freehold status   

The new Penang state government has no plans to follow the previous state government's policy of circumventing the NLC by converting all reclaimed land from leasehold to freehold status. Under Section 76 of the NLC a state authority cannot dispose of "any part of the foreshore or sea-bed for a period exceeding ninety-nine years." In other words the NLC expressly prohibits the state authority from converting foreshore land to freehold to protect and reserve coastal areas for public interest.

However I have been advised that after reclamation, there is no more seabed and foreshore, and therefore it is within the state's right to give private individuals freehold status for such areas. In other words, once a particular area is reclaimed, the foreshore and seabed cease to exist factually, physically and legally. The new government will not choose to exercise its powers to convert reclaimed land to freehold.

Whilst I disagree with the previous state government's arbitrary policy of converting reclaimed land to freehold, we have been advised by both the lawyers and consultants with the Penang Development Corporation(PDC) and the State Legal Advisor that

this conversion is legally valid as it was gazetted as state land and no longer as foreshore land;

the state government has to comply with the consent order directed by the Penang High Court to give effect to a "scheme of arrangement" to rescue the Bayan Bay project with a package that included converting what was once seabed and foreshore into a reclaimed land that has been converted to freehold.

All the parties involved had exercised their legal rights fully in court before withdrawing its final appeal to the Federal Court; and

Any attempt to refuse to comply with the consent order by the courts would attract substantial damages to be paid by the state government.

The Penang state government hopes that the public including some ADUNs and NGOs would not equate the necessity to comply with the scheme of arrangement decided by the previous state government as concurrence or even endorsement to converting reclaimed land (that were previously foreshore or seabed) from leasehold to freehold land. Even though the official legal view is that whilst the state authority can exercise such powers, the new government would not exercise such powers.

Gerakan new President Tan Sri Dr Koh Tsu Koon is advised again to co-operate with the new state government to expose more land scams such as those done in on Bayan Bay Development project. and clarify or pour light in the one-sided agreements done to the detriment of the state and rendering the NLC a meaningless. It is regrettable that despite the new government's repeated calls to promote CAT, the old state government has still refused to step forward and come clean on the land scams that have caused losses of hundreds of millions of ringgit.

* Lim Guan Eng, Penang Chief Minister Penang & DAP Secretary-General