WHEN I discussed whether to buy a car or a house first in my last article, I received a lot of feedback from friends and readers. Someone even sent me an interesting article entitled “Buying a New Car Is the Single Worst Financial Decision”.
The remark was made by Davis Bach, a self-made millionaire who is also one of the American best-selling financial authors, a motivational speaker and an entrepreneur.
That was a bold statement but not without basis. In the article published by CNBC Make It, David Bach said, “Nothing you will do in your lifetime, realistically, will waste more money than buying a new car.”
He pointed out that a car's value drops 20% to 30% by the end of the first year. In five years, it can lose 60% or more of its initial value. And, most people actually borrow money to buy a car.
“Why would you borrow money to buy an asset that immediately goes down in value by 30%?” says Bach.
His views concurred with the idea I have been sharing in this column over the years.
In my last article, I mentioned the value of my friend’s car dropped 70% from RM140,000 to RM40,000 over eight years. On the other hand, another friend who bought an affordable apartment during the same time, enjoyed a huge capital appreciation as the apartment increased from RM100,000 to more than RM200,000 during the same period.
Both borrowed money to buy their house and car respectively. However, there is a clear contrast between the two items by looking at their long-term values. A house is an appreciating asset, and a loan on such an asset I like to call a “Good Debt”; while a car losses money, and is therefore deemed as “Bad Debt”.
Not only does a car depreciate in value, but owning a car also comes with expenses such as petrol, maintenance, licence, toll, insurance and parking costs. A person who owns a normal sedan car and travels about 1,000 km per month, can easily spend about RM1,500 per month for car loan repayment and other relevant expenses.
With ride-sharing services (such as GrabCar in Malaysia, and Uber & Lyft in other countries) becoming so convenient, and with the LRT and MRT networks being more developed, we can now choose to be car-loan free. Imagine having your own “driver” and able to use your time productively to read a book or relax when being caught in traffic jam. We are now able to enjoy this with ride-sharing services on call.
For a more economical approach, you can even opt for a "hybrid" transportation mode by combining ride-sharing and public transport services.
Chua, a reader from Muar wrote me an email last month. He shared his experience of not having purchased a property when he was young and only bought one when he was in his mid-30s due to some misperceptions.
“Looking back, how wrong I was! But today, there are just as many graduates who think just like myself when I was in my 20s and 30s. Therefore, your constant reminder to Malaysians is valid and practical. Instead of a new car, get a used car. Buy a medical insurance policy, pay EPF and try to buy a small property. These should be the priority of any young Malaysian,” Chua wrote in his email.
Bach, the self-made millionaire said, “If you’re spending US$500 (RM2,000) a month for that car, well, that’s US$6,000 (RM24,000) a year, not including the car insurance or the gas (petrol). That could be two months or three months of your income. Run the numbers and then ask yourself: Do you really need a car that's nice or could you buy a car that’s less expensive – maybe a little older – but still looks good and runs?”
That’s the sentiment that I had when I wrote about buying a house first before a car.
Buying a car may not be the single worst financial decision for everyone. There are different financial priorities at different stages of life. However, it may be the case if you buy a brand new expensive nice car prior to owning any long-run appreciating asset or investment, like a house!
Food for thought by Alan Tong
Datuk Alan Tong has over 50 years of experience in property development. He was the World president of FIABCI International for 2005/2006 and awarded the Property Man of the Year 2010 at FIABCI Malaysia Property Award. He is also the group chairman of Bukit Kiara Properties. For feedback, please email bkp@bukitkiara.com
WHEN I discussed whether to buy a car or a house first in my last article, I received a lot of feedback from friends and readers. Someone even sent me an interesting article entitled “Buying a New Car Is the Single Worst Financial Decision”.
The remark was made by Davis Bach, a self-made millionaire who is also one of the American best-selling financial authors, a motivational speaker and an entrepreneur.
That was a bold statement but not without basis. In the article published by CNBC Make It, David Bach said, “Nothing you will do in your lifetime, realistically, will waste more money than buying a new car.”
He pointed out that a car's value drops 20% to 30% by the end of the first year. In five years, it can lose 60% or more of its initial value. And, most people actually borrow money to buy a car.
“Why would you borrow money to buy an asset that immediately goes down in value by 30%?” says Bach.
His views concurred with the idea I have been sharing in this column over the years.
In my last article, I mentioned the value of my friend’s car dropped 70% from RM140,000 to RM40,000 over eight years. On the other hand, another friend who bought an affordable apartment during the same time, enjoyed a huge capital appreciation as the apartment increased from RM100,000 to more than RM200,000 during the same period.
Both borrowed money to buy their house and car respectively. However, there is a clear contrast between the two items by looking at their long-term values. A house is an appreciating asset, and a loan on such an asset I like to call a “Good Debt”; while a car losses money, and is therefore deemed as “Bad Debt”.
Not only does a car depreciate in value, but owning a car also comes with expenses such as petrol, maintenance, licence, toll, insurance and parking costs. A person who owns a normal sedan car and travels about 1,000 km per month, can easily spend about RM1,500 per month for car loan repayment and other relevant expenses.
With ride-sharing services (such as GrabCar in Malaysia, and Uber & Lyft in other countries) becoming so convenient, and with the LRT and MRT networks being more developed, we can now choose to be car-loan free. Imagine having your own “driver” and able to use your time productively to read a book or relax when being caught in traffic jam. We are now able to enjoy this with ride-sharing services on call.
For a more economical approach, you can even opt for a "hybrid" transportation mode by combining ride-sharing and public transport services.
Chua, a reader from Muar wrote me an email last month. He shared his experience of not having purchased a property when he was young and only bought one when he was in his mid-30s due to some misperceptions.
“Looking back, how wrong I was! But today, there are just as many graduates who think just like myself when I was in my 20s and 30s. Therefore, your constant reminder to Malaysians is valid and practical. Instead of a new car, get a used car. Buy a medical insurance policy, pay EPF and try to buy a small property. These should be the priority of any young Malaysian,” Chua wrote in his email.
Bach, the self-made millionaire said, “If you’re spending US$500 (RM2,000) a month for that car, well, that’s US$6,000 (RM24,000) a year, not including the car insurance or the gas (petrol). That could be two months or three months of your income. Run the numbers and then ask yourself: Do you really need a car that's nice or could you buy a car that’s less expensive – maybe a little older – but still looks good and runs?”
That’s the sentiment that I had when I wrote about buying a house first before a car.
Buying a car may not be the single worst financial decision for everyone. There are different financial priorities at different stages of life. However, it may be the case if you buy a brand new expensive nice car prior to owning any long-run appreciating asset or investment, like a house!
Food for thought by Alan Tong
Datuk Alan Tong has over 50 years of experience in property development. He was the World president of FIABCI International for 2005/2006 and awarded the Property Man of the Year 2010 at FIABCI Malaysia Property Award. He is also the group chairman of Bukit Kiara Properties. For feedback, please email bkp@bukitkiara.com
Charm offensive: To restore its international
reputation, Huawei’s top guns including the normally reclusive Ren began
to grant interviews to foreign media to address concerns and talk about
the group’s technology edge. — Huawei/AFP
CHINA’s Huawei, the world’s largest maker of telecom equipment and second largest manufacturer of smartphones, appears to have cleared some key hurdles with the might of its superfast 5G wireless technology amid relentless attacks by the United States.
The Trump administration has claimed that Huawei poses a potential national security threat. It is lobbying its allies to ban Huawei’s equipment, which Washington alleges could be used by the Chinese government for spying.
The US prosecutors have alleged that Huawei stole trade secrets and worked to skirt US sanctions on Iran. On Dec 1, with the help of Canada, it arrested Meng Wanzhou, chief financial officer of Huawei and daughter of the company founder. She faces extradition to the US to be charged for various offences.
Washington has repeatedly cited a Chinese law passed in 2017 allowing state intelligence agency to compel individual organisations to “provide necessary support, assistance and cooperation” as proof Huawei can’t be trusted.
US Secretary of State Mike Pompeo has warned allies against using Huawei technology, saying it would make it difficult for Washington to “partner alongside them”.
There is also constant reminder that Huawei’s 74-year-old founder Ren Zhengfei was a former engineer in China’s army and joined the Communist Party in 1978, before setting up Huawei in 1987.
In the past one year, the international environment looked hostile and global picture looked grim for Huawei, when New Zealand, Australia and Japan followed the US to block Huawei in 5G involvement in their countries, while European nations led by Britain and Germany placed Huawei under scrutiny.
It looked like this global leader in the fifth generation wireless technology, which has operations in 170 countries, was to lose many potential customers in this non-stop anti-Huawei campaign.
The Chinese tech giant has vehemently denied all accusations by the US, saying these allegations are baseless and not proven. The Chinese government has also denied these claims.
Still popular: Attendees excited by the new Huawei Mate X foldable 5G smartphone revealed at the recent Mobile World Congress in Barcelona. — AP
Public relations offensive
When taking a soft approach in response to US assault did not help to restore its international reputation, Huawei decided to go on an aggressive PR offensive recently.
Huawei’s top guns began to grant interviews to foreign media to address concerns and talk about the group’s technology edge.
In a recent interview with BBC, the founder of Huawei declared in Mandarin: “There’s no way the US can crush us. The world cannot leave us because we are more advanced. Even if they persuade more countries not to use us temporarily, we can always scale things down a bit.”
Indeed, Huawei has already built up such a strong lead in 5G technology that it is practically irreplaceable, say analysts.
Huawei claims that its 5G technology is at least one year ahead of its rivals, and many in the tech world agree.
The most successful private company in China is an important part of Beijing’s efforts to advance superfast 5G wireless networks.
Although under Chinese law, firms had to “co-operate with and collaborate in national intelligence work”, the serious-looking Ren told BBC that allowing spying was a risk he wouldn’t take.
“The Chinese government has already clearly said that it won’t install any backdoors. And we won’t install backdoors either. We’re not going to risk the disgust of our country and of our customers all over the world ... Our company will never undertake any spying activities. If we have any such actions, then I’ll shut the company down.”
He described the arrest of his daughter Meng Wanzhou as “politically motivated” amid the year-long US-China trade war.
The US is pressing criminal charges against Huawei and Meng, including money laundering, bank fraud and stealing trade secrets. Huawei has denied any wrongdoing.
Huawei has also used the four-day 2019 Mobile World Congress in Barcelona held last week as a platform to further its media blitz.
Huawei’s chairman Guo Ping expressed hope “independent sovereign states will make independent decisions based on their own understanding of the situation and will not just listen to someone else’s order.”
He added that Huawei must abide by Chinese law and laws of countries where it operates.
“Huawei will never, and dare not, and cannot violate any regulations,” he pledged.
Faced with so much scrutiny, it is no wonder that Huawei’s issue overshadowed the launch of new products and other tech giants at the global trade fair.
To the delight of Huawei, GSMA – a global lobby representing more than 750 network operators and the Mobile World Congress organiser – has appealed to European policymakers not to ban Huawei in Europe’s 5G networks.
It urged countries to take “a fact-based and risk-based approach” in a statement that the US wireless industry did not endorse.
No evidence of spying
Amid Huawei’s PR offensive, which includes aggressive advertising and sponsorship of events, some good news started trickling in for the Shenzhen-based company that hires 180,000 people worldwide.
On Feb 12, it was reported that cyber-security chiefs in the National Cyber Security Centre of Britain had concluded that “any risk posed by involving Huawei in UK telecoms projects can be managed”.
This report is seen as casting doubt on US claim of the security threat from Huawei.
On Feb 19, independent tech news portal The Register reported that Europeans could not find any evidence of Chinese spying.
“No concrete evidence has so far emerged that Huawei equipment contains a backdoor or any other means for China to snoop on,” said the portal’s writer Kieren McCarthy, based in Los Angeles.
And according to media reports, Germany’s Cabinet has rejected American efforts to impose a global ban on Huawei, after its own security services reported that it has failed to find any evidence of spying.
Both the UK and Germany are huge markets for Huawei. UK’s mobile firms – Vodafone, EE and Three – have been working with Huawei on developing their 5G networks.
Huawei is said to command about 40% share in Europe’s telecom network and equipment market. Hence, banning Huawei could be disruptive in this continent.
As a clear leader in 5G technology, ditching Huawei could also mean falling behind on crucial innovation for Europe.
Indeed, Deutsche Telecom is predicting a two-year delay if Huawei is banned from 5G involvement in Germany.
In India, media reports have suggested that Delhi might ignore US pressure after establishing closer ties with China.
Huawei was allowed to participate in 5G trials in India last December.
Ignoring the anti-Huawei campaign, Maxis announced last week it was collaborating with Huawei to accelerate 5G in Malaysia.
Maxis, in a statement, said it had signed a memorandum of understanding (MoU) with Huawei at the 2019 Mobile World Congress in Barcelona.
It highlighted that Huawei has signed over 30 commercial contracts and shipped more than 40,000 5G base stations across Europe, Asia and the Middle East.
The MoU states that both parties will work to speed up the rollout of 5G technology in the country, working on full-fledged trials with end-to-end systems and services.
“Maxis has long started its 5G journey, and we are already focusing on live trials, investments and evolving our network infrastructure to be ready for a future where smart solutions will be part of everyday life,” said Maxis CEO-designate Gokhan Ogut.
Perhaps, the last thing Huawei expected was a tweet by US President Donald Trump on Feb 21 amid the US-China trade talks: “I want 5G, and even 6G, technology in the US as soon as possible. It is far more powerful, faster and smarter than the current standard. American companies must step up their efforts, or get left behind.
“I want the US to win through competition, not by blocking out currently more advanced technologies. We must always be the leader in everything we do, especially when it comes to the very exciting world of technology!”
Does this mean Huawei would be allowed enter the US market? But can Trump’s tweet be taken seriously by Huawei and Beijing?
China’s dream can’t be crushed
In fact, the onslaught against Huawei is creating big problems for mobile operators as they start building the next generation of wireless networks this year.
This will not only hurt Huawei but also its suppliers in the US and other players in the world, if the US has its way.
As expected, the anti-Huawei campaign has fanned up patriotism among Chinese consumers and the first casualty is Apple.
Demand for Huawei’s devices surged amid local campaigns to ditch US phones. Huawei sold 30 million phones in China in the last three months of 2018, nearly three times as many as Apple, whose sales plunged 20%.
The US-Huawei showdown is also hurting trade and diplomatic relations between China and the close allies of US.
Exports of Canada, Australia and New Zealand to China are seeing negative impact from retaliations from Beijing and tourism linked to Chinese has also taken a hit.
But Huawei’s success in 5G technology is more than geopolitics and competitive price. It represents the rapid rise of China as a tech power, which the US could not stomach.
There is fear by the US that China will control the technologies of the future. Already, China is advanced in AI (artificial intelligence) and has just become the world’s largest solar power producer.
China is the world’s second largest economy. Many analysts believe it will overtake the US to become the biggest economy by 2030, with the momentum created by its 2025 Made-in-China vision and other economic plans.
Huawei last year overtook Apple as the second biggest supplier of smartphones. The company is expected to overtake Samsung by 2020.
In Barcelona, Huawei announced that it expected to ship between 250 million and 260 million smartphones in 2019, up 20%-30% from 2018.
Judging from recent developments, the anti-Huawei campaign may put a brake to the rapid growth of this tech company, but it certainty will not crush Huawei and China’s ambition to lead in technology globally.
Why does the US government always crack down on Huawei?
To achieve this, it even uses some disgraceful measures, including
slandering the company by exerting its national power. The US moves have
sparked questions as to why the US fears the Chinese company so much.
Why does the company annoy the
It's been more than six decades since Malaysian independence, yet, more than ever, some politicians continue to wield the race and religion cards to divide us.
PATHETIC and disgusting. That’s surely an understatement in describing the continuous racist slurs non-Malays have had to endure.
Using non-Malays – particularly the Christians – as bogeymen hasn’t ended, even more than six decades after independence.
The situation has probably worsened because social media has made things more evident and amplified them. Thankfully though, politicians selling venom to their target audience can no longer be a covert affair.
These chameleons used to stir the hornet’s nest of race and religion with the Malays, portraying themselves as champions of their community. And then, they have no qualms attending events at Chinese new villages, where they try to please the residents by professing to be one people. Just to add value to the “show”, even a calligraphy writing session is entertained.
Next on their “tour” – get on stage, put their palms together, and greet the people in Tamil, and then do the dance bit, of course. And we bought all that, believing they portrayed the real Malaysia.
Incredibly, some are still doing the rounds. For a fresh twist, the LBGT element has even been thrown in now, and despite the charade being recorded, clarification must be issued to say otherwise. You know, I didn’t mean it.
Someone has forgotten that it isn’t only the ghosts, drunkards and LBGT community who are still awake at 11pm and need to use the toll.
These commuters include nurses, doctors, policemen, security guards, hawkers, taxi drivers, restaurant employees, firemen, factory workers, food deliverers and of course, journalists too, and we often work the infamous graveyard shift.
Scoring points and teaming up with an equally repulsive partner to create suspicion against other fellows, with fictional threats of race and religion, is just unacceptable.
While we cringe over the thought of how there are listeners who buy their hate speech, we expect these politicians to at least rise above these nauseating tactics and convince the people that they can provide better governance and deliver more than the present government.
They should prove to the people that the new government’s failings include not fulfilling its election promises, allowing the cost of living to go up and watching the ringgit’s value shrink. And to add ammunition, highlight how some ministers have even failed their probation.
That’s what a fault-finding Opposition is supposed to do – ensure check and balance, and behave like a government in-waiting, but here we have opposition Members of Parliament who can’t wait to broker a deal by defecting to the government’s side of the fence.
There’s another distateful story. It’s about an Umno MP who crossed over to Parti Pribumi Bersatu Malaysia and had the gall to admit that he was doing it for the constituents.
So, we have an odd situation where opposition MPs mourned the defeat of the previous government even after almost a year, and now plot to join the new government. Not plot to topple, of course, not that again, but plot to join. Naturally, it’s in the interest of the people.
We believe you, well, some of us do. Most of us know it’s just a lie, but hey, we are in the era of malu apa ...
Then, there are the “remnants”, who probably won’t be accepted by the new government, and figure that the only way for them to get back on the gravy train is to stoke the fires of racial and religious sensitivity. You’ve got to give it to this lot, though. They are, at least, fighting back, although their methods are pretty despicable.
However, the hate speeches will likely work in some constituencies, where, like oil, it burns the minds and hearts of angry voters who are already struggling to put food on the table for their families.
Still, it’s the pits when someone like Barisan Nasional secretary-general Datuk Seri Nazri Aziz resorts to claiming that having a non-Muslim Attorney General is not “lawful” since he took oath without swearing on the Quran. Nazri, of course, is bluffing, but he’s like those snake oil peddlers who will say anything to make a sale.
Nowhere in the Federal Constitution does it state that an AG needs to take an oath using the Quran. And surely, we won’t expect the likes of Nazri to concede that in the history of Malaya, there were six British AGs.
Cecil Sheridan, who died aged 88 in 2000, was the last British Attorney-General of Malaya and helped in drafting the constitution of its successor state, Malaysia.
When Malaya attained independence in 1957, Sheridan was promoted to Solicitor-General and in 1959, became the country’s Attorney-General. He also helped in the preparations for the formation of Malaysia in 1963 and in the process, worked closely with Tunku Abdul Rahman, the Prime Minister of Malaya, Tun Razak Hussein, its deputy Prime Minister, and Lee Kuan Yew, of Singapore.
True, the eight subsequent successors were Malays, but there’s no race and religion criteria in the appointment of the top-ranking public prosecutor of the country.
The first Lord President of Malaysia – now renamed Chief Justice – was a Scot named Tun Sir James Thompson, who assumed the post in 1963 when Malaysia was formed. He held the post until 1966.
Likewise, after independence in 1957, Malaysia's first two finance ministers were ethnic Chinese – Tun H.S. Lee and Tun Tan Siew Sin. However, from 1974 until very recently, the post had been held by Malays.
So, what we are effectively saying is that our founding fathers had no issue with the ethnicity of these important posts such as chief judge, attorney general and finance ministers. However, as six decades have worn on, we have become more degenerate, insisting on focusing on race and religion, instead of qualifications, credibility and integrity as the main criteria?
Certainly, these men, who held the loftiest positions, did well then, and many of us can accept that they didn’t collude with individuals to loot the wealth of this country and the Malays – who make up the bulk of Malaysians.
The harsh reality is that the pilfering and corruption are shamelessly executed by those claiming to fight for their race and religion. They shouldn’t blame anyone else or try to fan the flames of racial discontent to save themselves. Malaysians are tired of such perversion, so we can’t allow such incorrigible politics to proliferate in our beloved country.
One Chinese Finance Minister, a Christian Chief Justice and an Indian Attorney-General aren’t going to be able to control a country of 31 million people, where Malays and the indigenous people make up 61.7%, compared to the the shrinking Chinese (20.8%) and Indian (6.2%) population.
As for religion, according to a 2010 estimate, Muslims number most at 61.3%, Buddhists 19.8%, Christians 9.2%, Hindus 6.3% with Confucianism, Taoism and other Chinese practices at 1.3%, others 0.4%, no religion 0.8%, unspecified 1%.
As for the 1.6 million civil servants – the then-Minister in the Prime Minister’s Department Datuk Seri Shahidan Kassim told Parliament that as at December 2014, the ethnic composition of the civil service was as follows: 78.8% Malays, Bumiputera Sabah (6.1%), Bumiputera Sarawak (4.8 %), Chinese (5.2 %), Indians (4.1 %), other Bumiputera (0.3%) and others (0.7%).
As for the police force, then-Home Minister Datuk Seri Dr Ahmad Zahid Hamidi said non-Malays only made up 5% of the 133,212-strong force.
“Of the total, 80.23% or 106,871 are Malays, while Chinese make up only 1.96% (2,615), Indians 3.16% (4,209), Punjabis 0.21% (275) and others 14.44% (19,242),” he said in replying a question by Raja Kamarul Bahrin Shah (Amanah-Kuala Terengganu).
And we haven’t even counted the Prime Minister, Deputy Prime Minister and the Malays holding key posts in the Cabinet, and of course, the overwhelmingly Malay armed forces, numbering 420,000 personnel. It’s downright contemptible for our politicians to make fictional claims of non-Malays gaining control of the country, when the facts and figures clearly speak for themselves. For most rational Malaysians, we just want to see a clean government and civil service, which can safeguard our national interest, regardless of race and religion.
The late Chinese premier Deng Xiaoping famously said that it doesn’t matter if the cat is black or white, so long as it catches the mice.
Our recent history has showed that our big fat cats didn’t catch the mice but ended up becoming rats themselves.
Wong Chun Wai began his career as a journalist in Penang, and
has served The Star for over 27 years in various capacities and roles.
He is now editorial and corporate affairs adviser to the group, after
having served as group managing director/chief executive officer.
On
The Beat made its debut on Feb 23 1997 and Chun Wai has penned the
column weekly without a break, except for the occasional press holiday
when the paper was not published. In May 2011, a compilation of selected
articles of On The Beat was published as a book and launched in
conjunction with his 50th birthday. Chun Wai also comments on current
issues in The Star.
Ongoing work: A general view of the road project linking Kampung Sungai Pinang to Kampung Pulau Betong.
It's is unnecessary and the money is better spent elsewhere, says locals
BALIK PULAU: The government’s move to build a RM53mil road linking Kampung Sungai Pinang in the north to Kampung Pulau Betong on the south-western end of the island has got local folks fuming.
Fisherman Wan Mohizan Wan Hussein is one such person. The 52-year-old said the project would threaten Balik Pulau’s image of being “one with nature”.
“It would be better to spend the money on flood mitigation in the area,” he suggested.
“If it rains for two hours straight, there will definitely be flooding. That’s something that should be addressed,” he said.
Wan Mohizan said furthermore, the new road would be built along an existing narrow dirt trail and he felt that prices of land in the vicinity would increase.
“What if developers start coming here and offer to buy Balik Pulau farmland for development? Can we stop them?
“This side of the island is flat and easy to develop. The road can change Balik Pulau,” he said.
Balik Pulau is the “last hinterland” of Penang island, a flat farmland of about 1,000ha with narrow dirt trails.
For the first time since Penang was founded in 1786, this land on the island’s rustic eastern side will get a two-way tarred 10.2km road stretching almost the entire north-south length.
But the road construction has left many wondering why this road was being built through mangrove swamps, padi fields, shrimp ponds and oil palm estates.
Another fisherman, Mazlan Sahib, 48, said the new road was unnecessary and it would only welcome over-development.
“There are hardly any residents living there so it doesn’t make sense to have it at all.
“The project might also be a threat to the mangrove swamps along the coast,” he added.
Balik Pulau’s Simpang Empat resident Zainudin Ahad wondered why the government planned to build a new road when the existing Jalan Baru that ran parallel to the new road about 3km away never experienced traffic congestion.
“I thought we need new roads only when existing roads are congested.
“The only traffic jam we get in Balik Pulau is in the town itself.
“There is never any traffic jam in the kampung area, so why give us a new road?” Zainudin questioned.
Kuala Sungai Burung Fishermen’s Association committee member Abd Malik Man, 55, said there was talk about the road project since the Barisan Nasional government.
“We thought that the project would be shelved. I didn’t think the new government would go ahead with it,” he said.
Abd Malik said many residents in the area around the new road were living or farming on government land and their leases might be over soon.
“The government has all the right to develop the land but the long-term impact should be taken into consideration,” he cautioned.
Even Balik Pulau MP Muhammad Bakthiar Wan Chik was dumbfounded by the new road.
He urged the Rural Development Ministry to look into more pressing areas that need the funds, beginning with flood mitigation, a new hospital and traffic snarls in the heart of Balik Pulau town.
“The new road is not top priority and does not serve much purpose,” he pointed out.
“I hope the ministry will practise stakeholder consultation with the locals and hold town hall meetings to see what the residents want.
“Neither the locals nor me knew that the road project was approved and the construction had begun,” he said.
He also appealed to the ministry to foster entrepreneurial projects for Balik Pulau’s numerous cottage industry products including bedak sejuk (cooling powder, a traditional facial treatment product), nutmeg, otak udang (prawn paste) and salted eggs.
By arnold loh and intan amalina mohd ali The Star
Parts of controversial road run along mangrove swamps
BALIK PULAU: The state government had tried to stall plans for a new road in Balik Pulau’s coastal farmland by insisting on an application for planning permission.
State Environment Committee chairman Phee Boon Poh said he had asked for realignment proposals of the road because stretches of this new road will run along the edge of the mangrove swamps.
“When the 2004 tsunami hit us, the mangrove swamp saved Balik Pulau from the worst effect.
“We also agree that the swamps are vital breeding grounds for the jumbo prawns that our inshore fisherman can catch when they are in season.
“So we want the road to be away from the swamps,” he said.
State Works Committee chairman Zairil Khir Johari said the requirement for an environmental assessment (EIA) impact report was initially done away with because the proposed road was to run along the existing dirt trail and the footprint was therefore too small to need an EIA.
“If there is proof that a tarred road through the western coastline of the island will impact the environment, we will not hesitate to require an EIA,” he said.
When told of the sentiments of the locals, a senior officer in the Rural Development Ministry declared that the ministry would immediately conduct a stakeholder consultation on the road construction.
“We renegotiated the road project because it was first proposed in 2016 and we did not want any more delays.
“But since there are signs that locals find the road unnecessary, we will go to the ground at once and find out what the Balik Pulau community wants,” the spokesman assured.
It is understood that the budget for the road comes from the 10th Malaysia Plan in 2015 and the state was willing to surrender 11.5ha of land along the route without asking for the premium, which came up to RM18mil, for the 10.2km two-way street.
Things changed after the general election when the Rural Development Ministry renegotiated with contractors and brought the price down to RM53mil from the initial ceiling budget that was over RM78mil.
As is permissible for government projects, the state government subsequently waived the need for planning permission and state approval was given late last month.
Rural Development Minister Datuk Seri Rina Mohd Harun visited the newly begun road construction last month.
Meanwhile, cycling enthusiasts were disappointed that the new road would be built over a dirt trail that made up the Balik Pulau Eco Bike Trail.
“This is a popular route for cyclists to enjoy some light off-road mountain biking across Balik Pulau’s rustic farmland,” one cyclist said.
A netizen, Adrian Chan, also wrote on Balik Pulau MP Muhammad Bakhtiar Wan Chik’s Facebook page: “We already have Jalan Baru (a two-way street serving villages in Balik Pulau). Just upgrade or widen it.
“We should keep the cycling trail. That is the only (rural) asset in Penang island.
“Batu Maung, Bayan Lepas all gone with the concrete like Queens Bay.
“Visitors from overseas really admire that we have a cycling trail with the nature view.”
Balik Pulau residents riled after finding out about latest development
BALIK PULAU: While residents in Balik Pulau are unhappy with a new road being built, it has been revealed that there’s actually a proposal to set up a new township on this last hinterland of the island.
A developer from Kuala Lumpur has promised farmers a payout of at least RM120mil to turn a strip of rural land on western Penang island into a township with nearly 600 houses, four blocks of high-rise buildings and two blocks of shoplots on top of community amenities.
It wants to develop 36ha of oil palm estates along which will soon be a new road for which the Rural Development Ministry is spending RM53mil to build.
When the road project was announced by the federal government last mid-December, many Balik Pulau residents were left wondering why the 10.2km road was needed along 1,000ha of oil palm land, shrimp ponds and mangroves, with hardly anyone living there.
Even the state government is left dumbfounded and completely unaware of plans to develop this countryside.
“This is something new to me. I don’t remember ever seeing a proposal to develop that area or to convert the land use.
“We have got to find out what is being planned. Is the ministry building that road for the developer?
“At first, we were unhappy that the road is being built right beside the mangrove swamp and we wanted another alignment away from it.
“And now we find out a developer has plans to build a township there.
“We will find out what is going on,” state Environment Committee chairman Phee Boon Poh told The Star, stressing that the road was a federal project and the state was kept in the loop about it on a “for-your-info” basis.
In a filing to Bursa Malaysia on Jan 30, the public-listed developer announced that it has entered into a joint-venture development agreement with Koperasi Kampung Melayu Balik Pulau Berhad to build 276 terraced houses, 214 semi-detached houses, 91 double-storey bungalows, two 16-storey blocks of condominiums, two 16-storey blocks of low-cost flats, two blocks of retail shoplots, a school, mosque, community hall and other public amenities on land which the co-op owns.
The 36ha is specified as being on Lots 254, 804 and 803 of the area.
A check with the Malaysia Co-operative Societies Commission database shows that the co-op exists though no other information on its members are available.
The developer guarantees in writing that the co-op will earn RM120mil, out of which RM45mil will be in cash payouts and the remaining will be given in the form of units built on the land.
It will be an 80-20 joint venture between the developer and the co-op, respectively.
The developer informed Bursa Malaysia that the gross development value of the joint venture deal is RM600mil.
In its Bursa Malaysia filing, the developer specified that the deal is conditional upon the successful extension of the land lease to 99 years, re-zoning of the land use category, and approval of all relevant building plans. The current status of the land is unclear.
For the first time since Penang was founded in 1786, the island’s rustic western coastline will get a two-way tarred road stretching almost the entire north-south length, from Bagan Sungai Pinang to Pulau Betong.
The road was first proposed by the federal government in 2016 and initially, the state Town and Country Planning Department requested the Public Works Department to apply for planning permission from Penang Island City Council.
The initial budget for the project was RM78mil and after the general election, the new government renegotiated with contractors and brought the price down to RM53mil.
Earlier, state Works Committee chairman Zairil Khir Johari said that the state waived the planning permission requirement after being convinced that the footprint of the road, which will be built along an existing dirt trail that villagers have used for decades, would be small.
The road construction began in December.
‘Risky to build on ex-mangrove swamps land
BALIK PULAU: A mangrove ecologist has warned of the risk of development encroaching into mangrove swamps, and the risks are for people and buildings.
Dr Foong Swee Yeok predicted that the road or planned property development on the eastern coastline of Penang island would not endanger the swamp or wildlife.
But she said the future road and buildings might suffer because the land on Balik Pulau’s coastline is all ex-mangrove swamp land, and there could be as deep as 25m of mud and clay down below.
“Developers will know how to pile deeply until they reach the bedrock for high rises, but there is no piling requirement for two-storey homes.
“You see nothing wrong in the first 10 years or so, but after that, things start sinking.
“Roads become wavy, uneven and start breaking apart,” she warned.
Dr Foong, who has been studying mangrove swamps since 1996, explained that the thick column of peat, mud and clay below the swamp is high in organic matter and once disturbed, it is prone to shifting over a long period after development.
“Waterlogged and anaerobic peat in the swamp becomes aerobic when drained. Then you get biological oxidation or mineralisation of the organic deposits. That is why the soil will sink,” she pointed out.
She said in developed ex-mangrove swamps on the island, such as parts of Bayan Lepas and Batu Maung, there have been numerous instances of buildings sinking and cracking after a few decades and this was due to the slow shifting of the mud and clay below.
Dr Foong also urged authorities to look into the operations of over 40 shrimp or fish dugout ponds fronting the land which a developer from Kuala Lumpur plans to build 276 terraced houses, 214 semi-detached houses, 91 double-storey bungalows, two 16-storey blocks of condominiums, two 16-storey blocks of low-cost flats, two blocks of retail shoplots, a school, mosque, community hall and other public amenities.
She said the tens of tonnes of shrimp and fish reared in the ponds produced vast amounts of nitrate and ammonia pollution.- The Star
Food for thought by Alan Tong
