-filepic
GEORGE TOWN: The RM35mil paid to PLB Terang Sdn Bhd is a buyout price for the rights, title, and interest in the facilities of a project, not compensation, says Penang Local Government, Town, Country Planning committee chairman H'ng Mooi Lye.
He said that the payment was agreed upon to transfer the rights and ownership of the facilities at phase 3 of the Pulau Burong landfill to the Penang Island City Council and Seberang Perai City Council.
"Following a mediation process between the company and both local councils, a settlement agreement was signed on Dec 18 after all parties agreed on the valuation of RM35mil.
The settlement payment will be made in stages from 2025 until 2027," he said on Tuesday (Dec 24).
H'ng said that PLB Terang Sdn Bhd was appointed to develop and operate phase 3 of Pulau Burong landfill, including the Material Recovery Facility (MRF), for 20 years from July 15, 2012 to July 15, 2032.
In July 2022, the state government reviewed the project's progress and found numerous instances of non-compliance and delays by PLB Terang Sdn Bhd.
Given the company's unsatisfactory performance, the state government decided to terminate the concession agreement and return project development responsibility to the local authorities.
PLB Terang Sdn Bhd's services were officially terminated on Aug 1, 2022, and site operations were handed over to MBSP.
After considering the works carried out by PLB Terang Sdn Bhd and the terms of the concession agreement, the state government, through both local councils, entered into mediation with the company to finalise the terms for transferring completed facilities to the councils.
"Initially, PLB Terang Sdn Bhd stated that the construction expenses for the facilities amounted to RM84.5mil. In response, both local councils conducted due diligence by appointing consultants to review the completed facilities and assess the construction costs," he said.
A report estimated the value at RM45mil.
Subsequently, both local councils mediated with PLB Terang Sdn Bhd to finalise the terms for transferring the facilities to the councils, agreeing on a valuation of RM35mil to be paid in stages.
Earlier, MCA vice president Datuk Tan Teik Cheng stated that the councils must explain the agreement to the public, including the reasons for terminating the integrated solid waste concession and what went wrong.
He said that there is a need for transparency in the councils' decision-making process, accountability, and use of taxpayers' funds on this issue.
"Why did the councils reach a settlement with PLB regarding the termination? Many details surrounding the matter need clarification," he said on Tuesday (Dec 24).
Tan, who is also the state MCA liaison committee chairman, said if councils fail to manage or monitor public projects effectively, leading to large-scale settlements, this behaviour could shift the financial burden onto citizens.
He urged the councils to handle public finances with greater caution, to avoid buyouts or settlements, and increase the tax burden on citizens due to poor decision-making by local authorities.
