FORMER Penang Chief Minister Lim Guan Eng today reiterated the need for open-tenders to be consistently practised in the state for public projects, as it can generate revenue and promote cost savings.
Addressing the Penang state assembly, Lim (Pakatan Harapan-Air Putih) said open-tenders can also reduce the fiscal deficit, which Penang is now enduring despite record highs in luring foreign direct investments.
Lim cited that the current account balance deficit had plummeted by RM 825 million over the past four years, from RM1.15 billion in 2019 to RM330 million in 2023.
This may be overcome if the state practises the open-tender system for strategic projects, he said.
Speaking on the motion of thanks to the Yang di-Pertua Negri's opening speech at the first session of the 15th legislative sitting, Lim cited an example of the controversy surrounding the 559 acres of land at the Byram Estates in Batu Kawan, which was awarded via direct negotiation instead of open-tender by the Penang Development Corporation (PDC).
It was questioned in an editorial by an economics newspaper how open-tender was not enforced in the deal and following a public outcry, the state was forced to reverse its previous decision and revert to an open-tender.
The end result, Lim said, was that the tender yielded a sale of RM780 million, which was 21 percent more than the direct negotiated price of RM646 million for the same land.
It was also revealed in a written reply to Lee Boon Heng (Pakatan Harapan - Kebun Bunga) that there were seven bidders for the project to develop industrial land (for the Batu Kawan Free Industrial Zone Phase II).
"If open-tender was practised earlier, the people of Penang would have made RM134 million more. This raises suspicions why direct negotiation was applied instead."
The state was accused in the news report of committing an error in signing a sales and purchase agreement through direct negotiation with a company, which was reportedly dormant - UMECH Land Sdn Bhd.
"What action has the state taken based on claims of two former board directors over the irregularities in the sale?,” he asked.
He also cited the problematic development of Gurney Bay after it was revealed that the contractor was fined up to RM1.6 million for being late by 65-days in completing the project, while the cost also shot up to RM247 million after taking into account the reclamation costs.
He also singled out the recreational grounds' faulty playground and the absence of a sprinkler system, monsoon drainage and poor quality in the contracting works.
Lim also claimed that the PDC was burdened with arrears and that certain parties were not settling their "consent fees" with the development authority.
"This has affected the financial standing of PDC," Lim argued.
Lim said that it is unfair for a board member of the listed PBA Holdings Bhd to receive a monthly allowance of up to RN47,600 for part-time services when for the first time, the state water authority was inundated with a constant flow of water disruptions.
He also reiterated for Penang to be accorded a special financial zone such as Forest City in Johor if the state wants to become the second biggest economy in the country.
The zone can be a catalyst to spur growth in the services sector in Penang, he said.
He said that the increased funding for Islamic religious affairs was good, but that equal increments for non-Islamic places of worship were also necessary. – May 28, 2024.
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