GEORGE TOWN: MCA today claimed that the DAP-led Penang government lost out on RM410 million for failing to include a clause in the feasibility studies for the proposed undersea tunnel and three paired roads project.
State MCA secretary Tang Heap Seng said had the clause been included in the undersea tunnel deal, the consultant company would have to give the state government 30 per cent of the land’s development value, which amounted to about RM410 million.
Tang said this was based on the assumption that the land parcel would be developed by a third party.
He said it was standard practice for the clause to be included in the deal if a state-owned land was earmarked for development.
“We arrived at the RM410 million figure based on the fact that 156 units per square feet density are allowed to be developed on the land. This is the amount that will have to be returned to the state government if the land is developed by a third party.
“Considering the 25 per cent profit margin, we estimate that each housing unit will be sold at a minimum of RM1.16 million,” he told reporters here today.
It was reported that the state government had given permission to increase the development density of the 0.4 hectares of land from 30 units to 156 units after the land was handed over to the consultant company.
It was also reported that the state government would hand over two plots of land measuring 2.29 hectares in Tanjung Tokong to fund the feasibility studies of the three paired roads.
Tang said the Penang government’s failure to include the ‘30 per cent clause’ would cause it to lose RM507 million once the proposed undersea tunnel project was completed.
“The projected total loss is derived from the total cost of the feasibility studies, which can be projected up to a difference of 655 per cent of its original value of RM305 million,” he added.