Local council MPSP to bite bullet on rental hike

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Last Updated: 4:47pm, Jun 30, 2014

BUKIT MERTAJAM (June 30): Seberang Perai Municipal Council (MPSP) is ready to bite the bullet in the form of criticisms hurled its way after new rental rates were announced for hawkers, and market traders on Friday.

The rates which are expected to take effect on Sept 1 will rise between 20% and 100% - affecting about 5,500 business lot lessees - was to facilitate MPSP to utilise the extra income to maintain all its food and wet market complexes.

MPSP president Maimunah Mohd Shariff said the rental rise of between RM30 and RM120 had become vital for the local council because the revenue currently collected was not sustainable due to rising operation and maintanence costs.

“MPSP started incurring more expenses than the collection in 2012 when we embarked on refurbishing wet markets and food complexes. The expenditure did not include emoluments.

“We cannot sustain that way in the long run. Hence, the decision to increase the rent for council premises which was last raised in 1992 and before that in 1967. We believe it is justifiable to raise the rent now,” she said.

She said MPSP made the decision to raise the rent in a full council meeting on May 23 where 13 food complexes and wet markets will see a 100% rise, nine of them – 60%, 54 units – 40% and 17 units – 20%.

In fact, Maimunah pointed out that the rental hike was in effect lower than those prescribed by local councils in Taiping, Sungai Petani, Kulim, Kangar, and Kuala Kangsar.

“We are not competing with the others but the rental increase decision was made because of rising maintenance and operation cost,” she told a press conference.

According to MPSP, revenue collected from 65 food complexes and 28 wet markets on the mainland amounted to RM5.1 million in 2010, RM3.5 million in 2011, RM3.4 million in 2012, and RM3.5 million in 2013.

In 2010, the expenditure was RMRM2.4 million while in 2011 it was RM2.2 million but in 2012 and 2013, MPSP spent RM1.4 million and RM919,818 more than the collection for renovation and maintanence.

The new rate for rental will affect the traders on the mainland comprising those who occupy uncovered and covered lots, and covered and uncovered stalls with secured and unsecured units.

“Previously, an uncovered square cost RM30 a month, a covered lot cost RM60 a month, a sheltered and closed stall at RM90 a month, while a closed and covered stall with security options at RM120.

“In September, the rental will rise according to the categories identified for the type of stalls in markets and complexes. The categories are based on the market or complex's estimated business turnover.

"We expect a backlash from the hawkers and traders because rental hike is a sensitive issue. However, we will bite the bullet. What else can we do?” she said, adding that local council officers will visit the lessees to explain the need for the rise.

On the island, Penang Island Municipal (MPPP) councillor Ong Ah Teong said he would propose for rent hikes but with incentives for food traders in private premises.

“This is a proposal I want to put forward to MPPP in order to increase rent which I think is low in comparison to the profit earned by traders. MPPP has never raised the rent but I think it is time to do that now.

“However, I am proposing that traders can reduce the payment by ensuring they abide by the conditions to keep their stalls clean and hygienic. If MPPP finds the units to be clean, perhaps a 30% discount could be given,” he said.

As for hawkers and wet market traders, Ong said no proposals have been made to increase the rates.

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