Restructuring our household debt

NEW Year always come with new resolutions. Finance is an important aspect of most people’s checklists when it comes to planning new goals.

While it is good to set new financial targets, it is also vital to re-look at our debt portfolio to ascertain if it is at a healthy state.

At a national level, our country also has its financial targets matched against its debt portfolio.

According to the latest Risk Developments and Assessment of Financial Stability 2016 Report by Bank Negara, the country’s household debt was at RM1.086 trillion or 88.4% of gross domestic product (GDP) as at end 2016.

Residential housing loan accounted for 50.3% (RM546.3bil) of total household debts, motor vehicles at 14.6%, personal financing at 14.9%, non-residential loan was 7.4%, securities at 5.7%, followed by credit cards at 3.5% and other items at 3.6%.

Evidently, residential housing loan is the highest among all types of household debt. However, a McKinsey Global Institute Report on “Debt and (Not Much) Deleveraging” in 2015 highlighted that in advanced countries, mortgage or housing loan comprises 74% of total household debt on average.

As a country that aspires to be a developed nation, a housing loan ratio of 50.3% to total household debt would be considered low, compared to 74% for the advanced countries. In other words, we are spending too much on items that depreciate in value immediately – such as car loans, credit card loans and personal loans – compared to assets that appreciate in value in the long run, such as houses.

Advanced economies, which are usually consumer nations, have only 26% debts on non-housing loan as compared to ours at 49.7%.

In order to adopt the household debt ratio of advanced economies, our housing loan of RM546.3bil should be at 74% of total household debt. This means that if we were to keep our housing loan of RM546.3bil constant, our total household debt should be reduced from the current RM1.086 trillion to a more manageable RM738bil. This would require other non-housing loans (car loans, credit card loans and personal loans etc) to reduce from 49.7% of total household debt to only 26%. To achieve this ratio, the non-housing loan debt must collapse from the current RM539.7bil to only RM192bil.

Reducing total household debt from the current RM1.086 trillion to a more manageable RM738bil would also have the added benefit of reducing our total household debt-to-GDP ratio from the high 88.4% to only 60%, making us one of the top countries globally for financial health.

Malaysia’s household debt at present ranked as one of the highest in Asia. Based on the same 2015 McKinsey Report, our household debt-to-income ratio was 146% in 2014 (the ratio of other developing countries was about 42%) compared to the average of 110% in advanced economies.

Adjusting the debt ratio by reducing car loans, personal loans and credit card loans will make our nation stay financially healthy.

Car values depreciate at about 10% to 20% per year based on insurance calculations, accounting standards and actual market prices. Assets financed by personal and credit card loans typically depreciate immediately and aggressively.

The easy access to credit cards and personal loan facilities tend to encourage people to spend excessively, especially when there is no maximum credit limit imposed on credit cards for those earning more than RM36,000 per year.

If we maximised the credit limit given without considering our financial ability, we will need a long time to repay due to the high interest rates, which ranged from 15% to 18% per annum.

Based on a report in The Star recently, Malaysia’s youth are seeing a worrying trend with those aged between 25 and 44 forming the biggest group classified as bankrupt.

The top four reasons for bankruptcy were car loans (26.63%), personal loans (25.48%), housing loans (16.87%) and business loans (10.24%).

It is time for the Government to introduce more drastic cooling-off measures for non-housing loans in order to curb debt that is not backed by assets. This will protect the rakyat from further impoverishment that they are voicing and feeling today.

As we kick start the new year, it is good to relook into our debt portfolio. When we are able to identify where we make up most of our debts, and start to reallocate our financial resources more effectively, we will be heading towards a sound and healthier financial status as a nation.

By Alan Tong – Food for thought

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 e-mail
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Who is sabotaging Penang undersea tunnel project?

Penang govt to blame, says Lau

PETALING JAYA: Barisan Nasional should not be blamed as it is DAP’s own doing that “sabotaged” the Penang undersea tunnel project, said Gerakan vice-president Datuk Dr Dominic Lau (pic).

He added it began when the DAP-led Penang government failed to provide feasibility reports on the project, which were supposed to be completed by April 2016.

“You missed the deadline and in October 2017, the special purpose vehicle (SPV) said there is no more urgency to complete the reports.

“Based on the original timeline, the first phase of the project was supposed to start construction in the first quarter of 2015 and completed by this year.

“As of now, this first phase has not even started construction,” he said in a statement yesterday.

Despite the multiple delays in the reports and the construction starting date, he said the Penang government did not appear to have penalised the SPV.

He said when the project was awarded, a statement was issued stating that shareholders of the SPV consortium are China Railway Construction Corporation (CRCC), Beijing Urban Construction Group (BUCG), Zenith Construction, Juteras Sdn Bhd and Sri Tinggi Sdn Bhd.

“But today, CRCC, BUCG and Sri Tinggi were no longer listed as shareholders while Juteras Sdn Bhd is listed as winding up – leaving only one (Zenith Construction) out of the four shareholders in the agreement.

“Despite a material change of the financial and technical strength promised during the award and what it is now, the Penang government still does not appear to want to cancel the project or penalise the SPV,” he said.

“Even five years after the contract was awarded, the SPV still only has paid-up capital of RM26.5mil – way below the RM381mil minimum paid-up capital required by the Penang government to deliver the project.

“Meanwhile, the SPV is on course to make billions in two property projects valued at RM800mil and RM15bil respectively,” he said.

Meanwhile, Barisan Nasional Strategic Communications deputy director Datuk Eric See-To said the agreement shown to the media by Penang Chief Minister Lim Guan Eng was different from the one MCA deputy president Datuk Seri Dr Wee Ka Siong said was not stamped.

The agreement shown by Lim in a press conference on Friday was between the Penang state government with Consortium Zenith-BUCG; and not between the state and CRCC.

Previously, the Penang state government had shown a copy of a letter of support from the CRCC to prove that it is a party to the SPV awarded to undertake the undersea tunnel project.

On Tuesday, Dr Wee’s statement noted that the Acknowledgement of Commitment signed by the state government with CRCC was not a legally binding document and was hence not stamped.

Related Link:

Penang has enough roads and linkages, say activists – Nation


I was referring to three paired road projects, says Guan Eng – Nation …

Ti slams Penang govt over lack of transparency – Nation

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Penang Landslide occured days after remedial works started

Cracks at Tanjung Bungah site began in June, Commissioner of Inquiry told

Expert panel: (From right) Yeo, Dr Gue and Prof Ramli arriving for the inquiry.

GEORGE TOWN: A temporary structure supporting a worksite slope in Tanjung Bungah developed cracks in mid-June, a Commissioner of Inquiry heard.

Soil Mechanic Sdn Bhd director Cheah Wing How, who was a sub-contractor of the project where a landslide killed 11 workers, said he was informed by a clerk to carry out remedial works as the granite wall had cracked.

Cheah said his team left after completing the granite works and soil-nailing works to enhance the stability of the temporary slope.

There was, however, no mention when they completed the works.

“When we returned, we found there were pile cap excavation works carried out near the slope.

“We believe there was soil movement that resulted in the cracks on the granite wall.

“We were carrying out remedial works and 11 days into the job, the landslide happened,” said Cheah, who has 20 years’ experience in the field.

Cheah was testifying on the first day of the public hearing into the landslide tragedy by the State Commission of Inquiry (SCI) at City Hall in Esplanade yesterday.

On Oct 21, last year, a landslide hit the affordable condominium project made up of two 49-storey towers with 980 units in total within the Permai Village township near the Tunku Abdul Rahman University College.

Among the 11 killed was site supervisor Yuan Kuok Wern, 27.

During the proceeding, the Penang Island City Council (MBPP) also presented eight drone videos that showed the slope and the surrounding area after the tragic incident.

SCI chairman Datuk Yeo Yong Poh said they planned to carry out a site visit tomorrow.

He also fixed the hearing to continue until Monday, followed by Feb 8 to Feb 11, March 24 to March 28 and April 18 to 25.

Other members of the commission are geotechnical expert Datuk Dr Gue See Sew and forensic geo-technical engineer from Universiti Teknologi Malaysia Prof Ramli Nazir.

The SCI was gazetted on Dec 21 last year to investigate the landslide after Yang di-Pertua Negri Tun Rahman Abbas gave his consent on Dec 6, 2017, for the appointment of the members of the commission and its terms of reference.

Meanwhile, Penang Citizens Awareness Chant Group (Chant) adviser Yan Lee said the entrance to the Teik Granite Quarry, which is located near the site where the landslide occurred, should be fenced up.

“Anyone can just walk into the site as the safety measure is not up to mark.

“We have voiced our concern to the Penang Island City Council, the Department of Environment as well as the Land and Mines Department,” he said yesterday.

By Chong Kah Yuan and Jo-Leen Wong The Star

Related Links:

Contractors in jitters over temporary slopes – Nation

Boulders slid down hill prior to disaster – Nation

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STRATA Property insights – Serious on strata

Important issues and frequently asked questions

STRATA-type property is and has been all the rage. It is also expected to be “the living model” if not already.

Whether in cosmopolitan cities or suburban fringes, and as space becomes “in want” and prices hike, we feature our final article on strata-related property highlighting pertinent questions frequently asked to which Chris Tan (CT) gives input on.

Q: What should one look out for in the S&P before deciding on buying a particular strata-titled residential property?

CT: Buying a strata title property is not just buying a property but buying into a community living regulated by law. As a buyer, you are not only responsible for your very own unit but also the common property within the development too.

There is an ongoing obligation to pay the monthly service charges and sinking fund until the day you sell the same to another owner.

Besides the S&P Agreement, you are normally expected to sign the Deed of Mutual Covenants too, that regulates the relationship of the many owners within the same development with house rules vis-a-vis the prescribed by-laws under the Strata Management Act. In addition to the compliance with these rules, you are also expected to participate in the management of the common property at the Annual General Meeting as well as the Extraordinary General Meeting.

In the completion of the S&P Agreement, do ensure that the seller has no more outstanding charges and sinking funds owing the management and that the deposits paid are to be adjusted accordingly.

Q: Can you please explain further on ‘share units’ of strata-titled property? How does this affect a residential strata-titled property owner or what is the relation between the owner and the share units?

CT: Share unit has always been there in strata living as it will be stated in the strata title upon its issuance. It is now capturing the limelight, given that it is now the basis to be contributed into the maintenance charges and not the usual rate psf of the size of your main parcel.

There are different ‘weightages’ for the main parcel, the accessory parcel and the type of usage to make up the various elements of the share unit.

Suffice to say that two units of apartments of the exact same size might have different share unit allocation, if one has more accessory parcels than the other, or one is of commercial usage while the other is residential.

Q: What are some current and common issues faced by owners of strata-titled residential property and how would these be best settled?

CT: Issue 1: Contribution to service charges and sinking funds from the owners have always been done on the total size (in sf.) of the main parcel. Under the new regime since June 2015, it should now be based on per share unit instead.

Share unit is a concept that takes into account the size and the usage (of different allocated weight) of both the main parcel as well as the accessory parcel. It’s stated clearly in the strata title when it is issued. It is also the basis of voting by poll if so requested in any General Meeting. Share unit is therefore now the basis of both contribution and control as opposed to just control in the past.

In theory, it should be a fair method for all. The issues are:

(i) Some strata owners find themselves paying more than before while some strata owners now pay less; and

(ii) The Share unit allocation under the previous legal regime was a result of consultation and discretion and not as transparently guided under the new law. It is a difficult process and to adjust again, particularly when the strata titles have been issued, will be tedious.

Issue No. 2: In Phased Development there is now a requirement to file the Schedule of Parcels (SOP) stating clearly the total share units to be offered under the entire development before one can proceed to sell. It therefore includes the later phases of a development that will only be developed in the future.

The issue is that this SOP can only be adjusted if we can get 100% of the owners to agree or it is a direction from the authority.

There will be no flexibility accorded to the developer who might want to change the SOP for the feasibility or sustainability of the development, taking into account the new circumstances of the future, in the best interest of the entire development.

Another related issue would be on the contribution of the allocated share units by the developer for yet to be developed phase in the maintenance of the common property already built and delivered.

Q: Any other ‘surprises’ or areas of concern that many strata-titled residential property owners are unaware of until after purchase of such residents?

CT: Don’t be surprised if the property does not come with an allotted car park, although it is a norm to expect a car park to come with the unit. It is not always the case.

Q: Like many busy owners of a strata-titled property who do not have the time to sit in at resident’s meetings with the management body – many have simply ‘gone with the flow’ of things as ‘questions/disputes’ require time for discussion.

What would you recommend for busy individuals who have ‘no time’ to attend such meetings but can only look at the annual/bi-annual strata/building management statements/financial reports? What should one keep an eye out for in these financial statements?

Why is it important to attend these meetings; what would owners be losing out on by not attending and being an ‘active owner’?

CT: It is a regulated community living and participation is expected of every owner.

Although many have chosen to be passive, you need to participate or run the risk of letting major decisions lay in the hands of the active few.

You should keep an eye to ensure that the charges collected are well spent, that collection should always be monitored and the performance of the appointed property manager.

Also, understand your rights and obligations as a strata owner is important, and ensure that you and your neighbors are equally aware of the same too.

Q: As a tenant, and not the owner of the ‘parcel’ – are they bound to all the By-laws?

CT: The by-laws, additional by-laws and amendment of such additional by-laws made by the Management Body shall not only bind the owners but also the tenants, chargess, lessees and occupiers.

Q: Any other important issues that you would like to highlight to readers of theSun?

CT: Moving forward, strata living will be the preferred way of community living. Take a keen interest to learn and understand this living model in order to get the most out of it.

There are many more frequently asked questions, especially on management bodies, by-laws and leakage and defects. Answers to these can be found in Chris Tan’s Owner’s Manual & Guidebook.

Follow our property column next Friday for more insights on the market in the local scene.

Source: Thesundaily


Penang hit by floods again !

GEORGE TOWN: Some 20 houses located on a slope in Hong Seng Estate in Mount Erskine were flooded due to blocked underground drainage.

“Not again!” was the reaction of factory worker S. Kalaiselvi, 42, who found herself neck-deep in water at her house at 2am yesterday after a three-hour downpour.

She waded through the water to higher ground with her parents, who are in their 60s.

“I have been living here for 26 years and only now am I seeing such floods,” said Kalaiselvi, who also had to move out when her house was hit by the massive floods on Nov 4 and 5 last year.

Her father Subramanian Peru­mal, 68, said he was still waiting for the relevant authorities to resolve the problem.

At the site, firemen had to install a water pump to draw out the rainwater, which flooded most of the units to waist level at one point.

It was the third time that the area was flooded since October last year.

Last Oct 30, blocked underground drainage caused floodings affecting six houses during an evening downpour, followed by massive floods during the Nov 4 and 5 storm.

On Sept 29 last year, seven houses in the estate were also affected by soil erosion.

Consultant engineer Datuk Lim Kok Khong had said the soil erosion was due to water seeping under the ground.

Kebun Bunga assemblyman Cheah Kah Peng, who has been barred from helping out with the registration of flood victims for the one-off RM700 aid given by the Penang government, was also there but offered no concrete solution to the floods in the area.

Pulau Tikus assemblyman Yap Soo Huey said nine houses had to be demolished to make way for repair works.

She said they had offered owners of the nine affected houses a low medium-cost unit each as compensation, but the residents insisted on staying put.

Earlier, Penang Flood Mitigation Committee chairman Chow Kon Yeow said the latest floods were caused by the continuous downpour that began on Thursday evening.

“The rain also coincided with a 2.34mm high tide at 2.30am yesterday,” he said.

Chow said the short-term measures to deal with the floods were to dig and deepen the rivers, and carry out upgrading and cleaning works at riverbanks to ensure that there were no blockages.

In Bukit Mertajam, a low wall sealing off the entrance to a lorry driver’s house prevented it from being submerged in floodwaters all over again.

While the water on the road outside was up to knee level, Heng Kai Chin’s home remained relatively dry, thanks to the metre-high barrier of cement and bricks.

But Heng, 43, still skipped work yesterday to keep an eye on the flooding.

A state flood report said water had entered at least 100 homes in Bukit Mertajam.

Source: The Staronline

Related Links:

Penang struck by yet another deluge

PENANGITES woke up to a cloudy and rainy morning as continuous downpour lasting for hours inundated several parts of the state.
Wet day: Students wading through floodwaters at SMK Mak Mandin in
Butterworth, Penang. (Left) Motorists braving through the waters on the
flyover at Sungai Nibong, Bayan Lepas. — MUSTAFA AHMAD/The Star and
social mediapic



Metre-high wall keeps flood out of his home

More rain in Sabah and S’wak

Fish and veggie prices go up due to scarce supply

Two primary schools in Sabah remain closed

Flood-hit students eager to return to school


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Wanted: Leaders who listen !

Turning a blind eye: The grumblings over exposed hills are growing louder but little is being done to rectify the situation


 Grievances from residents warning of environmental damages must not fall on deaf ears

 “Leaders who don’t listen will eventually be surrounded by people who have nothing to say.

MY family home in Kampung Melayu, Air Itam in Penang, is more than 56 years old. That’s about my age, and it has never been hit by floods. Not once!

But last week, my parents – dad is 92 years old and mum, 86, – had their sleep rudely interrupted sometime after 1am by water gushing into their home.

They have been sleeping on the ground floor for years now because they are too old to climb the stairs to their bedroom.

The water that flowed into their room almost touched the top of their bed but fortunately, one of my nephews and his wife from Kuala Lumpur were staying over that night.

It was so fortunate that they were there to calm my anxious parents down and assure them all would be fine. They managed to comfort my stunned folks, who had never experienced such an unpleasant situation before. My father had to be carried to the room upstairs as the house remained flooded throughout the early morning.

Our home was filled with layers of mud the next day and the cars parked outside were all damaged. They sadly look like write-offs.

My father’s pride and joy, his first-generation Proton Saga car – which he bought in 1985 – is now unusable.

A week on, my brothers and nieces are still cleaning up the mess from the massive flood. They haven’t had the time or mood to even assess the financial losses.

And bound by a common sentiment as Penangites, they are tired of the blame game, a trade the state’s politicians have plied to near-perfection.

How many times can the finger be pointed at the previous government, with the incumbent almost 10 years in power? And how many more times can we blame it on torrential rain, which came from Vietnam – or wherever? Worst of all is, when discussions are mooted on flood issues, the voices of the people are swiftly silenced.

It appears that even to talk about hillslope development, one would have to contest in the elections, or be perceived to be challenging the state government, or more extremely, be some kind of lackey in cahoots with the Federal Government.

Blaming everyone else except oneself is simply a way of covering up one’s weaknesses. But the discerning public, in a maturing democracy with heightened transparency and a huge middle class like Penang, will not tolerate such short-term manoeuvring for long.

Suddenly, civil society – a buzzword among politicians – has vanished, with NGOs now regarded as irritants and an affront to the state establishment. Politics is apparently the monopoly of politicians now.

As the National Human Rights Society aptly puts it, “With the benefit of hindsight, we are sure that the Penang government now realises that they should not so readily malign civil society, howsoever obliquely – for the legitimate and well-founded articulation of matters of great concern to civil society.

“This is because it undermines the fundamental values of a functioning democracy and the fundamental human rights of the populace at large.”

Perhaps, the state political elites, many of whom aren’t pure blood Penangites, don’t realise the state is the home of a vibrant civil society, with many active NGOs and activists who are respected influencers of society.

Having walked through the corridors of power and appreciated power’s pleasures, perks and the adulation it brings, maybe it is becoming much harder for people to take criticism. This is, in fact, a reflection of the arrogance of power.

Many have developed thin skin now, with little tolerance for the slightest form of criticism. If anyone even dares raise their voice, an army of cybertroopers, hiding behind anonymity, are unleashed to attack them.

Freedom of speech, it seems, is only the domain of the opposition, with some media (regarded as unfriendly) unceremoniously ridiculed and questioned for their attendance at press conferences.

There are politicians from the Federal Government, too, who are shamelessly cashing in on the flood situation in Penang.

Their relief work must be splashed across news pages, and they have to be seen wading through the flood waters for dramatic purpose. Phua Chu Kang’s iconic yellow boots could likely be the hottest item in the state, as politicians bask in the media’s glare.

Ridiculous remarks have also been passed, one even blaming the state government, saying it has earned the wrath of God.

The rain and floods will go away, eventually. Penangites are stakeholders in the state, and they don’t only make up politicians. The state doesn’t belong to the state government or the opposition.

Caught up in the thick of the action, we seem to have forgotten that the hills are crumbling even without rain. As a stern reminder, just last month, a landslide buried some people in Tanjung Bungah. Investigations on that tragedy are still ongoing.

Basically, the trees – which act as sponge on the hills – are gone. We don’t need to be soil experts to know that.

The grumblings are growing louder because the hills have been progressively going bald in recent years. But the voice of discontent has fallen on deaf ears.

Penangites are alarmed at what they are seeing, and they don’t like it one bit, as much as they understand that land is scarce on the island and property developers need to source some to build homes on.

While it’s easy to hang the Penang state government out to dry for its follies, it’s difficult to ignore how the floods in the east coast states have become annual affairs, too. So, what effective flood mitigation plans have been put in place there?

Kelantan has suffered senselessly, and after more than a year of having been subjected to Mother Nature’s havoc, many victims have yet to recover from their losses. Flooding is obviously nothing exclusive and doesn’t discriminate. Every state has, unfortunately, experienced it in some shape or form.

So, irrespective of location, when life returns to normal, you can expect the politicians to resume their old denying ways.

If there’s a thread that binds our politicians – regardless of which side of the political divide they come from – it is their inability to apologise for their mistakes, despite waxing lyrical about accountability.

Don’t expect them to say sorry, because an apology would be admission of guilt, or worse, a sign of weakness in their realm of inflated egos.

And to put things into perspective, perhaps we could learn a lesson from a quote by prominent American pastor Andy Stanley – “Leaders who don’t listen will eventually be surrounded by people who have nothing to say.”
On the beat Wong Chun Wai

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 the group’s managing director/chief executive officer and formerly the group chief editor.

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.

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Hills, landslides, floods and damaged houses: What to do?

Hills, landslides and floods: What to do?

 The mega floods in Penang which followed the landslide tragedy, flash floods in Kuala Lumpur and Petaling Jaya, and a shrinking water catchment area in Ulu Muda … it’s time our leaders paid attention to the environment.

THE news has been full of the related issues of hill cutting, logging, landslides and floods. The environmental crisis is back in the public consciousness, and we should seize the moment to find solutions and act on them.

Penang has been the epicentre of this upsurge, for good reasons: the mega flash floods and landslides over the weekend and on Sept 15, and the Oct 21 hill slope collapse in Lembah Permai (Tanjung Bungah) which killed 11 employees at a construction site.

Saturday’s overwhelming floods in Penang, which paralysed the island in so many ways and affected lives, property and activities, was a megashock not only to people in the state but throughout the nation.

But it’s not just a Penang phenomenon.

On Oct 30, flash floods caused massive traffic jams in Kuala Lumpur and Petaling Jaya.

Federal Territories Minister Datuk Seri Tengku Adnan Tengku Mansor said the floods were caused not only by heavy rain but by developers of two projects that had blocked drainage.

A stop­work order will be issued if the developers do not take measures specified by City Hall.

Another threat is the logging of valuable water catchment areas.

The Ulu Muda forest in Kedah, which provides much of the water supply to Kedah, Penang and Perlis, is under such a threat as the originally designated Ulu Muda water catchment area has shrunk by 87% from 98,400ha in 1969 to 12,484ha in 2017.

The forest reserve was the most important water catchment area in the Northern Corridor Economic Region but timber production there was growing because Kedah depended on logging as a source of income, said Penang Water Supply Corporation CEO Datuk Jaseni Maidinsa ( The Star, Oct 27).

He suggested that the federal government compensate Kedah for gazetting and preserving Ulu Muda as a water catchment area, noting that the Muda Dam provided 80% of the daily raw water needs for Kedah.

Jaseni issued this stark warning: when logging affects the Muda Dam’s ability to store sufficient water, all three states would face a water crisis in the next dry season.

In Penang, the debate on the floods and the tragic landslide has continued non­stop and moved last week to the State Assembly.

The clearest explanation of the worsening flood situation that I have heard was the presentation by scientist Dr Kam Suan Pheng at the Penang Forum event on Oct 29.


A former Universiti Sains Malaysia academic who then worked in international agencies including the International Rice Research Institute, Dr Kam said there were seven main causes of floods in Penang:

  • > Increasingly heavy rainfall; 
  • > Expansion of impermeable surface area;
  • > Eroded soil and landslides increase the sediment load in surface runoffs;
  • > Debris that clogs up waterways; 
  • > Accumulation of surface flow downstream;
  • > Limited capacity to channel off discharge; and
  • > High tides slow down discharge to the sea.

She provided historical and current data to show that flash floods are happening more frequently and with more adverse effects, even with lower rainfall levels. With higher rainfall expected in future, the situation can be expected to significantly worsen.

Dr Kam focused on expansion of impermeable surface area (caused by ill­ planned development and replacing natural ground cover such as hills, fields and trees that act as a water ­absorbing sponge) and soil erosion and landslides (caused by cutting and development in hill areas) as two factors that need special attention.

She quoted Datuk Kam U Tee, the Penang Water Authority general manager (1973~­90), as having correctly explained the Penang floods of October 2008, as follows: the floods were caused by conversion of the Paya Terubong and Bayan Baru valleys into “concrete aprons that do not retain water. The water immediately flows into streams causing flash floods even with moderate rainfall. Because of hill­cutting activities, the flowing water causes erosion of the slopes which carries mud and silt into the river beds”. ( The Star, Oct 24, 2008).

Flood mitigation and flood prevention are two types of actions to tackle the flood problem, said Dr Kam.

Mitigation measures only tackle the symptoms, are costly and need public (state and federal) funds. These include structural measures (upgrading rivers, installing pumps) and non­structural measures (drainage masterplan; flood forecasting and warning systems; public education).


Flood prevention should be the priority as that would tackle the root causes, said Dr Kam, who proposed the following actions:

  • > Proper land-­use planning and development control;
  • > Environmental, drainage, transportation and social impact assessments should be made   regarding development plans, beyond individual development projects;
  • > Stringent protection of hill land and slopes;
  • > Stringent monitoring of development projects;
  • >More greening of urban spaces, including a system of parks; and
  • >Protection of riverbanks.

To take these measures, policymakers have to deploy a wide range of policy and legal instruments, and to adopt environmentally sensitive and ecologically friendly structural and non­structural solutions, concluded Dr Kam.

Another speaker, Datuk Agatha Foo, complemented Dr Kam nicely when she elaborated on the various laws, guidelines and plans that can be used to prevent the wrong kinds of development, to control and monitor approved developments and to strictly enforce the laws.

She also spoke on the loopholes and weaknesses of the laws and how to correct them.

Events of the past few weeks alone indicate that the number of environment ­related and human-made problems are bound to increase, probably many times, unless our leaders and policymakers give higher priority to the environment and to well­ planned development.

The paradigm shift should start now, as the alarm bells have already rung.

Source: The Star Malaysia Martin Khor Martin Khor is executive director of the South Centre. The views expressed here are entirely his own.
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