The threat of bankruptcy is real: Guan Eng

GEORGE TOWN: Although the Penang government may not be liable for compensating developers whose planning permission is cancelled by the State Appeals Board (SAB), the threat of bankruptcy is real, said Chief Minister Lim Guan Eng.
He said this was the reason his administration had "unwillingly acceded" to all previous rulings made by the previous Barisan Nasional (BN) government to avoid huge compensation payouts.

He cited two cases of compensation where RM29.4million was paid to landowner Tang Hak Ju and where RM20million was paid to Boustead Holdings Bhd as examples.

"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," he said in a statement today.

Lim also welcomed the assurance by SAB chairman Datuk Yeo Yang Poh who on Monday said the state was not liable for compensation if the SAB revokes the planning permission but noted the decision was subject to judicial review.

He nonetheless said a potential compensation minefield was from landowners of land above the 76m development limit whose development was approved by the previous government as special projects.

He cited a recent case where the SAB ruled the Penang Island City Council did not have to approve the development order sought by a developer to develop land above the 76m limit and also decided compensation need not be paid.

He said the developer was given approval to build six units per acre or 15 units per acre under the previous government and that the company will bring the case to the Courts.

"This gives the Council an opportunity to overturn the special projects approved by the previous state government without paying financial compensation," he said.