'Scandalous!' This is how a social activist sees the Penang government's decision to return the RM100 million soft loan from the federal government to revitalise George Town following the implementation of the Control of Rent (Repeal) Act 1997.

Save Ourselves (SOS) secretary Ong Boon Keong said the state government committed a blunder by returning the fund when Penang desperately needed the money to rejuvenate George Town, which has turned into a 'ghost city' since 1997.

"The people of Penang have always been informed that the state government does not have enough fund to carry out major development projects over the past few years. But here the state government had returned a fund that was allocated to revive a dying city. It's scandalous," he added.

Penang is said to house the most pre-war buildings in the country, estimated to be more than 12,000 in 1997.

Since the1997 Act was effected, many pre-war houses, especially in George Town, were vacated by occupants when landlords began to hike up rental rates.

The city is now 'alive' only during the daytime and lacks the night entertainment and commercial activities.

'Insincere and futile'

In view of this, the state government successfully secured the RM100 million soft loan from the federal government to revive areas affected by the exodus of pre-war house occupants.

Through the fund, a maximum of RM50,000 was to be given to each pre-war building owners, as a soft loan, to upgrade and refurbish their buildings.

The move was inline with the state government's goal to have George Town listed under the Unesco's World Heritage Listing.

However, the soft loan scheme did not work as pre-war building owners either did not or could not secure a single sen to upgrade their premises.

Firstly, the RM50,000 amount was too small to carry out a decent renovation work on the buildings.

Secondly, under the guidelines, building owners will have to allow their existing tenants to stay in the upgraded homes for another three years at the old rental rates.

Moreover, the lax in administrative laws allows landlords to manipulate the guidelines by first demolishing their buildings and rebuilding it after paying a small fine.

Ong said the state government should have relaxed the conditions to enable the landlords to obtain loans and improve their buildings.

"This could have saved George Town. Instead the state government chose to be rigid and scandalously returned the money," he added.

Chief Minister Dr Koh Tsu Koon and his aide could not be reached for comment.

Local politicians said the fund could have given the much needed booster for the state economy.

They added that by returning the fund, the state government had proved that its 10-year campaign to place George Town under the heritage listing was insincere and futile.

ATHI VEERANGGAN is malaysiakini 's Penang-based stringer.