Penang government reviewing developers contribution cost

GEORGE TOWN: The Penang government is at the tail end of reviewing contribution costs imposed on developers to bring down development costs so the savings are passed on to the public.

State Housing, Town and County Planning Committee chairman Jagdeep Singh Deo (pix) said discussions with the local government and relevant authorities were now on finalising the issue.

Using the infrastructure contribution as an example, he said a formula has been worked out adding that fixed rates were being considered for other types of contributions.

Jagdeep also refuted the suggestion contributions in Penang were the highest as some states were equal or higher but did not name them.

"If we cannot reduce them (contributions), we will not increase them and will look at other ways to cushion the impact on developers," he said in a press conference today after attending the Penang International Property Conference.

Contribution costs are charges developers pay to local authorities in lieu of public amenities or low cost housing requirements.

Penang developers over the past years have raised concerns over increasing development costs, claiming the rise was due to contribution costs, among other factors.

On the proposal to impose rent control, Jagdeep said George Town World Heritage Inc (GTWHI) has been tasked with conducting surveys and workshops to gather feedback.

He said the state was not rushing into the matter and that the proposal was only at the preliminary stage.

He clarified the proposal was not to reintroduce prewar rates but to prevent rents from suddenly spiking by 200 to 300%.

"We will discuss the mechanics of it, what is the control in relation to the increase, all these things are up for discussion," he said, adding the State Legal Adviser will be presenting the legal views on the issue to the Exco next week.