Backbenchers whack CM Chow in the state assembly over PDC’s RM6.7m bonus payout

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Penang chief minister Chow Kon Yeow said the exact amount owed to PDC might be less than the estimated RM400 million, after adjustments. (Johnshen Lee pic). For image info, go to https://www.freemalaysiatoday.com/category/nation/2025/03/19/pdc-preparing-report-on-amount-owed-by-chief-minister-incorporated 

Backbenchers whack CM Chow in the state assembly over PDC’s RM6.7m bonus payout

KUALA LUMPUR, May 21, 2025: Penang Chief Minister Chow Kon Yeow has come under fire following Penang Development Corporations (PDC) RM6.7 million) bonus payout to its staff.

PDC is a Government-Linked Company (GLC) and Chow is its chairman.

In the state assembly debate yesterday, backbenchers questioned the rationale of the bonus payout despite the state’s deficit budget.

No News Is Bad News reproduces a news report on the state assembly proceedings:

Malaysia

Six-month bonus for what? Penang reps denounce PDC over RM6.7m payout amid budget deficit

DAP's Lim Guan Eng delivers his speech during the announcement of the Kuala Kubu Bharu by-election candidate at the DAP operations centre in Kuala Kubu Baru, on April 24, 2024. — Picture by Sayuti Zainudin

By Opalyn Mok

Tuesday, 20 May 2025 4:23 PM MYT

GEORGE TOWN, 20 May — Several Penang backbenchers have questioned the rationale behind a six-month bonus for staff of the state-owned Penang Development Corporation (PDC), particularly given the state's deficit budget.

Joseph Ng Soon Siang (DAP-Air Itam), Lim Guan Eng (DAP-Air Putih), and Lee Khai Loon (PKR-Machang Bubuk) sought explanations during their respective debates at the state legislative assembly yesterday and today regarding the approval of the bonus.

Ng argued that while the state government is facing financial constraints, PDC opted to announce the large bonus for its staff instead of potentially using funds to pay off debts owed to the government and banks.

“PDC is not a private company as it is a GLC with assistance from the state and federal government in terms of land acquisition and loans,” he said.

Lim said the six-month bonus announced for PDC staff was reportedly the highest of all government agencies.

“Who is receiving this six-month bonus?” he asked, noting that the total bonus payout was RM6.7 million.

He argued that if the bonuses were clearly justified, they would not have become such a hotly discussed topic among civil servants.

Lim also raised concerns about controversies involving PDC, such as the five-year delay in the expansion of Jalan Perusahaan to Jalan Tok Kangar in Central Seberang Perai.

“The project, costing RM21.6 million, was supposed to be completed by 2021 but is now expected to be finished at the end of 2026,” he said.

He also brought up the Ladang Byram/Changkat issue, involving 559 acres of land initially sold through direct negotiations to UMECH Construction Sdn Bhd for RM646 million.

Referencing the state’s financial situation, Lim pointed out the need for a RM100 million advance from the federal government.

“The state must explain why its financial situation has worsened, where RM1.15 billion in its consolidated revenue accounts in 2019 had dropped by RM1.1 billion by the end of 2024,” he urged, asking for a detailed breakdown of expenditures that led to consecutive deficits between 2019 and 2024.

Lee questioned whether the PDC staff bonus is contractual or a recent development, and asked how the amount was decided.

He noted that 54 per cent of PDC’s revenue is derived from land sales, while 22 per cent comes from profits on investment sales.

“Aren’t these state lands? If so, shouldn’t the revenue from their sale be returned to the state government and not distributed as bonuses to PDC staff?” Lee queried.

Another backbencher, Gooi Hsiao-Leung (PKR-Bukit Tengah), also expressed concerns about the state’s fiscal deficit, which he said has persisted for 13 consecutive years.

“Our consolidated funds have also declined from RM2.2 billion in 2022 and RM2.1 billion in 2019 to a mere RM199 million as of May this year,” Gooi said, calling the situation unsustainable.

“We are asking for a new fiscal framework to be formulated in the 13th Malaysia Plan that reflects respect for Penang’s role, recognition of our constraints, and responsibility from the federal government,” he proposed.

Gooi suggested that the federal government provide a share of Sales and Service Tax (SST) revenue, introduce a new formula-based equalisation grant for all states, implement transparent fiscal transfer mechanisms, and offer incentive grants for high-performing states.

Malaysia

Guan Eng raises concerns over Penang’s financial status

Lim (Air Itam-PH), said that his concerns stem from the revelation that Penang was facing a ‘cash crunch’.

Updated 1 day ago · Published on 20 May 2025 6:27PM

Lim suggested that the state entice more involvement from the private sector to further stimulate the economy. - May 20, 2025

 

by Ian McIntyre

FORMER Penang Chief Minister Lim Guan Eng has raised concerns over the financial status of the state and its development arm - the Penang Development Corporation (PDC).

Lim (Air Itam-PH), said that his concerns stem from the revelation that Penang was facing a ‘cash crunch’.

To overcome the financial pitfalls, Lim suggested that the state entice more involvement from the private sector to further stimulate the economy.

He thanked the Federal Government, which last year, accorded the state with an advance of RM100 million to ensure that the cash flow was sustainable here.

Also, a cash infusion is needed because Penang needs to spend to prepare for the mega infrastructure projects such as the Mutiara Light Rail Transit (LRT) project, the expansion of the Penang International Airport and the overhead highway from Sungai Dua to Juru.

The former finance minister said the state needs to clarify how the financial status of Penang eroded until the state Consolidated Fund was reduced from RM1.15 billion in 2019 to less than a billion in 2024.

"The state needs to fully explain there the money went to and what it was spent on," said Lim.

He added that efforts to enhance the collection of tax and revenue for the state should be welcome.

"But it should not come at the expense of the aid pledged previously to those who are eligible."

Lim also pointed out that one of the suspected reasons why the state faces a cash flow issue, was the outstanding debt of RM300 million to the PDC.

In 2023, the chief minister (Chow Kon Yeow) mentioned that the state did not owe anything to PDC but in less than two years, it was then stated that the state owes PDC hundreds of millions, he said.

The state sitting was given misleading information about this matter, Lim claimed.

He pressed on that the state's economy registered a growth of 3.3% in 2023, which was lower than the national GDP average of 3.6%.

Lim hoped that the state GDP for last year, would surpassed the national average of 5.1%.

 Lim also claimed that PDC is embroiled in another controversy following the delay of the expansion from Jalan Perusahaan to Jalan Tok Kangar in Bukit Mertajam.

It was supposed to be completed by 2021, but it was apparently delayed.

Lim said that despite the controversies surrounding the arm, PDC was rewarded with a payout of a six-month bonus by the state.

"Does this sum justify the performance of PDC?" Lim asked. - May 20, 2025.