Kedah demands RM100m annual royalty for leasing land to Penang

MB says current amount too low, unchanged since 1786.

Kedah is demanding RM100 million a year from the federal government as Penang land lease royalty payment.

Menteri Besar Muhammad Sanusi Md Nor (below) said the Kedah state government is of the view that the value is appropriate and in accordance with the current value as the state government had been receiving an annual royalty of RM10,000 all these years with the special payment of RM10 million a year since 2018.

“The current Penang land lease royalty payment is only RM10,000 a year. Ask anyone and he will say that it is unreasonable.

“We want the Penang royalty payment to be reviewed and given according to its current value. We demand it to be RM100 million,” he told a press conference after chairing the state executive council meeting in Alor Setar today (Oct 27).

He said the RM100 million was actually small compared to the revenue generated by Penang.

The menteri besar said it was hoped that the demand would be given fair consideration by the federal government in view of the tabling of the national Budget 2022 at Dewan Rakyat this Friday, or if not, to be included in the 12th Malaysia Plan.

On the basis of the demand, Sanusi explained that Penang land had been leased from Kedah since 1786 with a payable annual royalty of 10,000 in Spanish dollars.

Since independence, he said the payment was changed into Malaysian currency with the amount remaining at 10,000.

“It is totally unreasonable for the value in 1786 to be maintained until 2021 without any review of a possible increase of the amount. I have been informed by the Kedah ruler (Sultan Sallehuddin Sultan Badlishah) that he has repeatedly raised the matter at the Conference of Malay Rulers and to the attention of the federal government.

“The sultan has also provided the agreement documents related to Penang land lease to the federal government. Finally, starting 2018, the federal government agreed to give the state RM10 million and RM10,000 a year,” he said.

Sanusi said if the Valuation and Property Services Department were to make a specific valuation on the lease involving the entire Penang land, including Seberang Prai, the annual royalty payable may reach up to RM500 million.


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