GEORGE TOWN: An influential Penang public group today chided Boustead Holdings Bhd for claiming RM60 million from the island municipality (MPPP) to compensate for the height reduction of its proposed 12-storey hotel to only five.
Penang Forum Working Group described the claim as “a case of an economic Goliath (Boustead) bullying a puny David (MPPP)”.
“It’s not a pretty spectacle to enhance Boustead’s international image, nor would it manifest good corporate social responsibility,” the group said in a statement today.
It said Boustead should realise that Penang’s gain would also be the company’s gain and vice-versa.
“Boustead will earn more from a down-sized hotel in a World Heritage Site than from a full-scale hotel in a delisted site,” Penang Forum said in a statement issued jointly by three activists – Ahmad Chik, Francis Loh Kok Wah and Anil Netto.
It said the compensation claimed by Boustead would be at the expense of Penangites.
It stressed that as a responsible corporate citizen, Boustead, with a group pre-tax profit of RM502 million from revenue of RM5.4 billion in 2009, should not penalise Penangites.
On the contrary, it said MPPP had been operating a RM40 million-deficit budget with a projected revenue of only RM230 million for 2010.
Dismayed with Boustead’s compensation demand, Penang Forum called on the corporate body to “look at the bigger picture and take into account the long-term socio-economic benefits for all”.
It said George Town’s heritage listing had potential to reverse Penang’s slow decline as an international tourist destination, adding that several heritage sites have already reported a five-fold increase in visitors.
It said international prestige aside, being a World Heritage Site would bring enormous economic benefits for all, including Boustead.
'Damaging to international reputation'
Penang Forum reminded Boustead that in the first place, it should not have been given approval by the previous Barisan Nasional administration for the 12-storey hotel in the core George Town heritage area.
George Town and Malacca received joint international heritage recognition from Unesco in July 2008.
The listing compels the Penang government and local authority to fulfil many international conditions and obligations, among which is to restrict the height of new buildings in the core zone to be less than five storeys.
“It will be unthinkable for the authorities not to observe the height rule, which could result in George Town losing the listing so soon after getting it.
“It would be extremely damaging to our international reputation,” said Penang Forum.
Penang Forum is an informal network of some three dozen Penang-based NGOs along with concerned individuals who came together in April 2008 for the inaugural Penang Forum to chart a possible way forward for Penang after the historic 2008 general election.
Chief Minister Lim Guan Eng said recently that Boustead wanted compensation for reducing the height of its soon-to-be-constructed RM140 million Royale Bintang Hotel in Weld Quay area, next to the general post office.
“We are not even cancelling the project.
“It’s just a reduction of height and Boustead is claiming RM60 million from MPPP,” claimed Lim.
Boustead is one of four companies which had received approval from MPPP to build hotels in heritage zones before the 2008 heritage listing.
In November 2008, the Penang government, under intense public pressure, requested Boustead to reduce the proposed height.
The state government is still negotiating the quantum and form of compensation to Boustead, while the company has alternatively asked for land in Penang.
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