SEBERANG PERAI, April 1 — The Penang Regional Development Authority (Perda) sold off its 3.4-hectare land in Seberang Perai at a RM15 million loss to avoid losing a further RM10 million due to issues with the land, the federal agency’s chairman Datuk Shabudin Yahaya said today.

He said that Perda decided to sell off the land to a private developer at a lower price of RM1.42 million with the condition that the houses built there are to be sold at between RM42,000 to RM72,000 or a maximum of RM200,000.

He said the RM15 million “loss” that Perda had to bear for selling the land is considered a “subsidy” for the 250 low cost housing units to be built on it in the future, if the project is approved.

“If we sell it at the current value of the land, at RM16.6 million, the market price for houses built on it will be at between RM400,000 to RM500,000 which is above the affordability of people in this area,” he told a press conference here.

He also said Perda will use the RM1.42 million from the sale of the land to buy another piece of land in south Seberang Perai to build low-cost and low to medium-cost housing units.

The Barisan Nasional MP said the development project for that piece of land in Taman Tok Keramat was abandoned for over 30 years.

“Phase one of the project involved 107 units of housing which had to be demolished when the land had sedimentation problems as it was next to a river and the project was abandoned since then,” he said.

The initial plan for the project was to build low-cost housing in 1988, which was why the land was divided into 260 lots, he said.

Shabudin said Perda had only recently decided to develop the land after conducting a cost benefit analysis on it.

“The cost benefit analysis revealed that the project will be a liability to Perda and we would stand to lose RM10 million if we continued with the project so we decided to sell it to a developer with conditions that they build low cost housing units on it,” he said.

“Perda is also considering taking legal action against those that slandered the agency by releasing inaccurate information about it,” he added.

Yesterday, Penang Chief Minister Lim Guan Eng questioned Perda’s reasons in selling the 3.4ha piece of land along Jalan Dato Keramat near MRSM Transkrian on the mainland at below market value.