The Penang state government wishes to highlight two recent High Court cases which reveals the potentially huge compensation payout faced by the present Penang state government involving hundreds of millions of ringgit due to criminal failures of the previous BN state government.
The two recent cases involve one in Majlis Perbandaran Seberang Perai(MPSP) in 1994 known as the NEG Engineering Sdn Bhd case involving a huge RM 243 million claim whilst the second one is against the state government on a land acquisition matter in 1992 known as the Bagan Serai Housing Estate Sdn Bhd case on the present Megamall complex site in Prai, Seberang Perai. MPSP was fortunate to win the NEG Engineering Sdn Bhd case which involved an active politician who was a leader in the previous government, but there is a possibility that they may appeal. Reports have also been filed by MPSP to the police and Malaysia Anti-Corruption Commission(MACC).
Unfortunately the Penang state government lost the second case, the Megamall case, and is appealing to the Court of Appeal involving potential compensation that could be similar to NEG Engineering Sdn Bhd. This Megamall case is similar to the state government losing on another land matter in Bukit Mertajam due to an error by the previous state government, resulting in compensation of RM 29.4 million to Tang Hak Ju. The state government was forced to pay RM 14.7 million and is still trying to reclaim back the sum in courts.
Again Majlis Bandaraya Pulau Pinang(MBPP) was forced to pay RM 20 million compensation to Boustead Holdings Bhd to reduce the height of their hotel from 12 storeys approved by the previous government to 5 storeys. This RM20 million payment was made in exchange for reducing the height of the building by 7 storeys, to comply with the promise made to UNESCO, but not fulfilled by the previous government, that all buildings in the George Town Heritage area would not exceed 5 storeys or 18 meters.
The present Penang state government lives in daily fear and nightmare of facing huge compensation payouts due to the failures of the previous BN state government that can bankrupt the state. When compensation was paid by the state government, no one offered or raised a single cent to assist us despite sweet promises made by some NGOs. The threat of bankruptcy is real. For this reason, the Penang state government has unwillingly acceded to all previous rulings made by the BN state government to avoid huge compensation payout that can bankrupt Penang.
One of the potential threats is compensation claims by landowners above 76 meters who were approved development as special projects by the previous state government, which may run up to billions of ringgit.
Welcomes Professor Prof. Gurdial Singh Nijar And Dato Ambiga Sreenevasan To Assist The Majlis Bandaraya Pulau Pinang(MBPP) To Avoid Paying Huge Compensation Legally For Rejecting Development For Land Above 76 Meters(250 Feet) Or Special Projects That Were Approved By The Previous Government.
We wish to welcome Universiti Malaya Law Professor Prof. Gurdial Singh Nijar and Dato Ambiga Sreenevasan to assist the Majlis Bandaraya Pulau Pinang(MBPP) to avoid paying huge compensation legally for rejecting development for land above 76 meters(250 feet) or special projects that were approved by the previous government. This follows the latest decision made by Dato Yeo Yang Poh, the Chairman of the Appeals Board, established under the Town & Country Planning Act on the Sunway Bhd case.
The Appeals Board indicated that MBPP did not need to approve the development order sought by Sunway Bhd for their land above 76 meters that were allowed development of either 6 units per acre or 15 units per acre by the previous government. And that compensation need not be paid by MBPP for rejecting such special projects from landowners.
However, this Appeals Board decision can be subject to judicial review by the High Court. Sunway Bhd and other landowners affected by this decision has 90 days to do so. Sunway Bhd has communicated to me of their intention to do so and may seek compensation, should the Appeals Board decision be affirmed by the High Court. This gives MBPP an opportunity to overturn the special projects approved given by the previous state government without paying financial compensation.
I am pleased to announce that we are getting high-powered legal expertise in both Professor Gurdial and Datuk Ambiga. Both have consented to assist the state government legally when the judicial review is argued in the High Court, in what is expected to be the case of the century for planning law in Malaysia.