Boustead seeks RM60 million compensation from Penang

GEORGE TOWN: Boustead Holdings Bhd has submitted a RM60 million compensation claim from the Penang Island Municipal Council (MPPP) for having to scale down its Royale Bintang Hotel project from 12 floors to five.

Penang Chief Minister Lim Guan Eng said the state government had directed the developer to scale down the project to meet Unesco requirements of 18m, or five-storey, height ruling in the core heritage zone of Weld Quay following George Town's inscription as a Unesco World Heritage site.

In a media report on Monday, April 5, Boustead Holdings Bhd deputy chairman and group managing director Tan Sri Lodin Wok Kamaruddin was quoted as saying that the height of the new Royale Bintang Hotel would be reduced, but Boustead was seeking compensation that could include land.

"The claim made by Boustead for having to reduce the height by seven floors is RM60 million, but we are still negotiating on this," Lim said in response to the report on Tuesday, April 6.

"The compensation for land was also raised but is still under discussion," Lim said.

Lim added that there were no problems with three other projects that were also affected by the Unesco ruling, namely Asian Global Business Sdn Bhd (AGB) Rice Miller Weld Quay Development in the core zone; E & O Bhd's annexe building of the E & O Hotel in the buffer zone; and Low Yat group's project along Jalan Sultan Ahmad Shah.

All four projects were approved before Penang was declared a Unesco World Heritage site on July 7, 2008. The 18m/five-storey height restriction contained in the dossier submitted to Unesco was put in place once the listing was made official.

Lim lambasted certain non-governmental organisations (NGOs) that had urged the state government to cancel the Boustead project but do not realise the financial implications of doing so.

"To reduce the project by seven storeys, the developer is claiming RM60 million, and whatmore if the project is cancelled?

"This is not even the doing of this current state government, as the project had been approved by the previous Barisan Nasional state government, which despite agreeing to the Unesco ruling of five storeys, had approved the 12-storey project.

"We are trying to correct and resolve the mistakes made by the previous state government, but we cannot take certain decisions as suggested by some parties, which will bankrupt this state government, including calls to cancel the project," Lim said.

Boustead's initial plan was for a RM140 million development of a four-star hotel with 300 rooms.

The developer had been given the approval to build up to 51m before George Town's listing as a Unesco World Heritage site in July 2008.

On another matter, Lim announced the setting up of a communications unit within the state government's information committee.

The unit will be headed by former journalist Yap Lee Ying, who will work with 11 liaison officers who have also been appointed to serve the 11 opposition constituencies under Umno.

Lim said the liaison officers would disseminate information from the state government to these 11 constituencies and prevent any misinformation from spreading.

"We have no choice but to set up our own communications unit.

"There have been instances in the past where the Information Department has refused to help the state government, including during the Maulidur Rasul procession, and we do not want the people there to miss out on other projects and programmes carried out by the state government.

"They have also been misinformed on various initiatives carried out by the state government, including aid for the senior citizens, in which many of them in these constituencies did not register or were hoodwinked not to do so.

"These liaison officers will serve the constituents, as the state government does not discriminate against those who are in opposition-held constituencies," he added.

Looking for properties to buy or rent? With >150,000 exclusive listings, including undervalued properties, from vetted Pro Agents, you can now easily find the right property on Malaysia's leading property portal EdgeProp! You can also get free past transacted data and use our proprietary Edge Reference Price tool, to make an informed purchase.